Greenland may be a costly white elephant. Now, it is technically part of Denmark, which subsidizes Greenland to the tune of almost $700 million per year. In Greenland, “government spending came to DKK 9.6 billion [$1.4 billion], or 42 percent of GDP. Just under half of the latter sum was funded by an annual Danish government grant, which amounted to approximately 20 percent of Greenland’s GDP.”
But President Trump wants Greenland to become part of the U.S. That has damaged relations with Denmark — a NATO ally. As a result, Denmark may stop purchasing billions of dollars worth of airplanes and weapons systems from the U.S., and instead buy them from other countries. That may cost American manufacturers billions of dollars in sales.
As Reuters notes, “Trump, who first floated the idea of buying Greenland in 2019, has renewed his calls for the U.S. to take over the island since his return to the White House in January, and he has not ruled out using force to achieve this objective…The governments of both Greenland and Denmark have voiced opposition to any U.S. takeover.”
Trump’s designs on Greenland are contributing to a reluctance by Danish leaders to buy advanced military aircraft from the U.S. “We must avoid American weapons if at all possible,” said the chairman of Denmark’s parliamentary defense committee. He said he regrets choosing America’s F-35 fighter aircraft for his country, citing the possibility that the U.S. may cut off support for the fighter in order to seize Greenland. “As one of the decision-makers behind Denmark’s purchase of F-35s, I regret it,” said Rasmus Jarlov, a member of parliament for Denmark’s Conservative People’s Party.
Jarlov was responding to rumors that the Lockheed Martin F-35 Lightning II may have a “kill-switch” that allows the U.S. government to remotely disable F-35s bought by U.S. allies.
On March 18, the Pentagon denied that the stealth fighter has such a kill-switch.
But the Danish MP was not convinced. “We obviously cannot take your word for it,” Jarlov said:
He added that the US could scupper Copenhagen’s use of the F-35 just by stopping the supply of spare parts — a similar dilemma that Ukraine faced when Washington temporarily paused military aid.
“I can easily imagine a situation where the USA will demand Greenland from Denmark and will threaten to deactivate our weapons and let Russia attack us when we refuse,” wrote Jarlov, who is also his party’s spokesperson for his stance on Greenland’s affairs….”Therefore, buying American weapons is a security risk that we cannot run. We will make enormous investments in air defense, fighter jets, artillery, and other weapons in the coming years, and we must avoid American weapons if at all possible,” he said.
“I encourage our friends and allies to do the same,” Jarlov added.
Denmark announced in 2016 that it was spending about $3 billion on 27 F-35s to replace its aging fleet of F-16 Fighting Falcons. Jarlov was serving as Denmark’s defense committee chairman at the time.
Greenland does have a lot of minerals. But as the Brookings Institution notes, “The conditions in Greenland are very harsh and technically demanding, and the costs of extraction high.” It could cost more to extract minerals than they are worth in many places in Greenland.
Is U.S. law any more more favorable to mining than existing Greenland law? If Greenland became part of the U.S., environmentalists might bring lawsuits against mining projects in Greenland, they way they bring lawsuits over mining projects in the U.S. under American laws like NEPA. In the U.S., for example, “New Mexico-based WildEarth Guardians has a lengthy record of litigation against the coal industry. Just in the past five years its attorneys have filed dozens of lawsuits and legal petitions against agencies that regulate mining on federal lands” for granting permits allowing mines to operate.
It doesn’t look like Greenland has to become part of the U.S. for American companies to mine there. Greenland’s government has said that it welcomes American investment in its mineral sector.
So even if America annexed Greenland, it might not be much easier for American companies to mine there.
The reason there aren’t more mines in Greenland seems to be because mineral prices aren’t high enough to justify a rapid expansion of mining in such a cold and inhospitable place. Chinese companies are happy to operate all across the world. But as the Brooking Institution notes, “Efforts to attract Chinese investment in mining projects in Greenland have so far yielded little interest and no significant investment,” “despite substantial efforts by the Greenland administration to attract them.” Because Greenland is not the most profitable place for mining companies to invest.
All the political parties in Greenland’s parliament oppose the idea of Greenland becoming part of the U.S., and public opinion in Greenland opposes becoming part of the U.S.
