Trump’s Wish to Buy Greenland Says a Lot about the World's Economy

Several days ago, information was leaked to the US press that President Donald Trump was considering buying the world’s largest island (save the continent of Australia) – Greenland – from Denmark. Unsurprisingly, internationally this was met with widespread hilarity. Moreover, there was indignation in Greenland and Denmark. Both firmly said that the territory was not for sale. At the same time, Trump sought to portray the idea as “essentially a large real estate deal.”

Trump’s intention is nothing new considering the US history of land purchasing. In 1803, Thomas Jefferson bought a large piece of land from France for $15m, which became known as the “Louisiana Purchase”. More than half a century later, in the 1860s, Andrew Johnson paid $7.2m to the Russian Empire for Alaska. Actually, even Denmark once sold territory to the US when in 1917 Woodrow Wilson got the Danish West Indies for $25m. The islands were later renamed the US Virgin Islands.

As unserious as it might sound, Trump’s statement on Greenland actually represents and follows Washington’s earlier attempts to buy the island. The purchase of Greenland was first mentioned under the presidency of Andrew Johnson when in 1867 a report by the US State Department suggested that Greenland's strategic location was an ideal option for acquisition. In 1946, US President Harry Truman offered Denmark $100m for the territory. Thus, there is certain consistency in the US approach to Greenland.

Putting Trump’s offer into the context of larger international relations might help us to understand the strategic reasons behind Washington’s drive for the purchase.

Greenland’s location is at the core of the US drive. The island is between the Russian Arctic and the East Coast of the US. Having a larger presence on the island would give the US, which already has a military presence in Greenland, the Thule Air Base, opened in 1943, a bigger impact on Arctic affairs where Russia is working hard to increase its presence.

Surprisingly, another strategic reason behind American thinking on Greenland is China. China is also active in the Arctic, and although this is to a lesser extent than Russia, it has been Beijing’s recently very active economic and scientific policies on Greenland that likely worried the Americans. Indeed, there were even reports a few years ago of the intention to buy an abandoned port (as many thought, for military purposes). It did not work for the Chinese, but their intention was alarming to the US.

The Greenland issue also fits into the recent trade competition between the US and China. Everyone remembers Beijing’s warning to the White House that it might stop exporting a whole set of rare raw materials to America.

On the periodical table of elements, the last two rows are lanthanides, rare materials most of which are found in China and extremely vital to the US military as well as for other important sectors. Americans understand they are dependent on Chinese goodwill which might easily change considering tensions between the powers. Thus, for America, it is crucial to find an alternative source of these rare elements to mitigate Chinese threats of export cutting.

This is how Greenland came to light, as the world’s biggest island has many of said lanthanides. Moreover, Greenland also boasts iron ore, lead, zinc, diamonds, gold, rare-earth elements, uranium and oil.

Greenland is home to more than 57,000 people as of 2018, and mostly relies on Denmark for its budget revenue. Denmark is a member of NATO and Greenland is already under the US military security umbrella, but having the island as a 51st state would expand the US outreach to the Arctic, control of the Atlantic Ocean and secure import of rare elements integral to America’s defense and technological sectors.

By Emil Avdaliani

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19 August 2019 17:17