In today’s Finshots, we dig into the reasons why Donald Trump is so eager to buy Greenland.

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The Story

Are you amused by the title? Well, it’s sort of a real thing. You’ve probably heard the news that Trump has his eyes on the world’s largest island, Greenland, in the Arctic near the North Pole. Yes, he wants to buy it and make it a part of Alaska.

And it’s not the first time that the US is doing that. It turns out the US has quite a history of shopping for land!

Did you know Alaska wasn’t always a part of the United States? In 1867, the US bought the state of Alaska from Russia for $7.2 million. And even before that, in 1803, they bought Louisiana from France for $15 million.

But these were not mere purchases for the sake of it. Take the Louisiana Purchase, for example.

Back then, the New Orleans port of Louisiana was the main highway of trade for the US, connecting goods from the American heartland to the international markets. However, the Americans faced obstacles from Spain, which once controlled Louisiana, and then later from France.

Then American President Thomas Jefferson stepped in swiftly, recognising New Orleans’ strategic importance and the need to keep trade routes unhindered. So, he sent negotiators to France to buy the port. But in a surprising twist, cash-strapped Napoleon Bonaparte made a once-in-a-lifetime offer. Instead of just New Orleans, he proposed selling the entire Louisiana Territory!

And this story is a reminder of how America has historically approached land acquisitions through a lens of financial and geopolitical rationale. Greenland might just be the next chapter in this playbook.

But to understand that, you'll need a bit of background.

You’ve likely heard of China’s Belt and Road Initiative, a modern twist on the ancient Silk Route aimed at boosting global trade through infrastructure and connectivity. But China is taking it all the way to the Arctic, yes, to the frozen north. This initiative is called the Polar Silk Road (PSR).

What’s the PSR all about, you ask?

See, we all know that the polar ice is gradually melting. And in the coming decades, climate change could create ice-free seasons in the Arctic Ocean. This could generate a seaway as a leading trade route between the Americas, Europe and Asia, significantly reducing shipping times compared with the traditional trade routes like Suez or the Panama Canal. And even the costs would steeply decline, thereby benefitting China’s massive trade networks.

Besides, it’s not just about shipping. The Arctic is like a treasure trove of natural resources ― oil, gas, rare earth minerals, you name it. And China, being a resource-hungry nation, wants to grab as much as it can. Plus, there’s the opportunity for scientific research as the Arctic offers a front-row seat to study climate change and explore new technologies.

And to realise its ambitions, China is trying to bring near-Arctic countries on board to develop the Northern Sea Route (NSR). This route, part of the Polar Silk Road (PSR), could become a faster and more efficient shipping path between Asia and Europe.

You see, China already has good relations with Russia, largely because it’s one of the biggest buyers of Russian oil at a time when Western nations have boycotted Russia. But it’s also reaching out to Norway, Sweden, and Denmark. To sweeten the deal, China is pitching joint projects like satellite navigation systems, fibre optic cables, and energy ventures, including Russia’s Yamal LNG project.

Meanwhile, Iceland and Greenland have shown interest in China’s plans for Arctic infrastructure.

And that’s where Donald Trump steps into the picture!

He's determined to push back against China and Russia’s growing influence in the Arctic, especially in Greenland. Now Greenland, though technically part of Denmark, operates with a fair bit of autonomy, which is why Trump has offered Denmark a deal which essentially says that, “Hey, we’ll protect Greenland by deploying frigates, air wings, missiles and infantry. But in return, Denmark and Greenland would have to allow the US to tap into Greenland’s rare earth minerals, oil and other resources.”

Sure, it might seem like Trump is doing Greenlanders and Denmark a favour, but that’s not really the whole picture. Just take a look at the prices of critical minerals like antimony and gallium. They’re soaring, thanks to their growing importance in battery and EV technologies. So, for the US, this is actually less about charity and more about seizing a golden opportunity to secure these valuable resources.

But the Arctic isn’t just about resources. It also holds considerable military importance, serving as a prime location for nuclear-armed submarines that can hide beneath the ice and, in the event of conflict, strike North America, Europe and Russia. Now, if China controls the region, this will be a major threat to the US.

Also, Greenland already hosts the US Pituffik Space Base under costly lease agreements. To put this in perspective, under the Biden administration, the US signed a 12-year, $4 billion deal to maintain a military presence on the island. So, owning Greenland could streamline Trump’s defence spending and turn the region into a self-sustaining financial asset.

And guess what? Trump might actually stand a chance at influencing Greenland. 

Look, although it’s an autonomous region, Greenland is still economically dependent on Denmark, which provides substantial annual support through a block grant. Fishing remains the most important driver of the Greenlandic economy, though the industry no longer sustains as many jobs as it once did. And at this juncture, Greenland’s government has its sights set on independence and is exploring how to cash in on the island’s rich mineral resources, including gold, natural gas, diamonds, lead and zinc, hoping to attract foreign investment.

But if Trump were to persuade Greenland’s government that aligning with the US could bring more economic benefits than staying under Denmark’s umbrella, the island might consider straying.

This would give the US a free hand to tap into Greenland’s vast resources while also countering China’s influence.

When you think about it, doesn’t this feel like a modern twist on the Louisiana Purchase? Just like President Jefferson recognised the strategic and economic value of New Orleans, Trump seems to have his eyes on Greenland for its geopolitical and resource-rich perks.

The only added layer this time is keeping rivals like China at bay.

And who knows, just as Napoleon needed the cash and sold Louisiana, Greenland might eventually consider Trump’s offer, especially if it boosts their finances. That is unless their drive for independence burns too strong to compromise.

Only time will tell. 

Until then…

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