Trump Wants to Buy Greenland for US 'Security'

Donald Trump reiterated his desire to buy Greenland to strengthen US national and economic "security" as he spoke to reporters while signing a flurry of executive orders in the Oval Office on his first day as president.

Trump's renewed interest has caught attention owing to the island’s increasing importance in geopolitical competition in the Arctic and its vast natural resources. The 47th president has also emphasized the military and economic activity of Russia and China in the Arctic as a reason for the US to buy Greenland. 

"Greenland is necessary not for us, it's necessary for international security," the Republican president said. "You have Russian boats all over the place, you have China's boats all over the place — warships — and they [Denmark] can't maintain it."

As global powers seek to expand their reach and footprint in the Arctic, mineral-rich Greenland — which hosts a US military base — is coveted for its security and trade importance. 

The president revived calls following his re-election on November 5. He first expressed interest in purchasing Greenland in 2019, during his first term as president, but Greenland and Denmark quickly rejected the offer. 

"I'm sure that Denmark will come along — it's costing them a lot of money to maintain it, to keep it," Trump said. Denmark is unable to "keep" Greenland, a self-ruling Danish territory, he said. 

Trump Wants to Buy Greenland to Hinder Chinese Expansion

A US-controlled Greenland would fulfill major objectives for the United States, including access to the territory's natural resources and its strategic location in the Arctic. Greenland is also home to the United States' Pituffik Space Base, which permanently houses the US military and is essential for early warning systems and air power over the region. 

It would also hinder China's efforts to make it a part of its Polar Silk Road initiative. China aims to utilize the Northern Sea Route (NSR), which could cut shipping distances to Europe by 23% compared to the Suez Canal route. Climate change-induced ice melt makes the NSR more accessible, enhancing the Arctic’s strategic importance for Beijing.

"If the people in Greenland want to be part of us, we can use those resources better and make sure Russia and China don't get advantages in the Arctic,” Joe Lonsdale, Palantir co-founder and billionaire Trump backer, told the BBC. "That sounds great to me."

Greenland rejected giving up territory to the US. However, its Prime Minister, Múte Egede, has expressed openness to closer ties with the US on mining resources.

Greenland Geological Map, Source: Research Gate

Egede said at a press conference on January 10 that Greenland's people don't want to be Americans but that he understands Trump's interest in the island given its strategic location and is open to greater cooperation with the US.

“We have the doors open in terms of mining. It will remain that way in the coming years. We have to trade with the United States,” Egede said.

Greenland-focused Stocks Surge on Trump's Bid

Following the press conference with Egede, shares of mining company Critical Metals Corp. CRML surged on January 10. The company that has exploration assets in Greenland marked its largest intraday gain since May.

Critical Metals Corp. Ordinary Shares (CRML), Source: NASDAQ 

In December, Critical Metals Corp. confirmed the presence of high-grade rare earth material at its Tanbreez Project in Southern Greenland.

Rare earth elements are essential for producing permanent magnets used in electric vehicles and wind turbines.

Greenland is home to 25 of the 34 critical raw materials identified by the European Commission as strategically important for Europe’s industry and the green transition.

European Defense Stocks Surge 

A few days earlier, on January 8, European defense stocks surged when Trump reiterated his commitment to increasing NATO spending and his emphasis on Greenland’s strategic significance during a Mar-a-Lago press conference.

Speculation that Trump’s comments could pressure European nations to increase defense budgets affected markets. Shares in Italian aerospace company Leonardo S.p.A. FINMY, German arms manufacturer Rheinmetall AG (OTC: RNMBY, Swedish aerospace company SAAB AB (OTC: SAABF), and Norwegian aerospace company Kongsberg Gruppen ASA KGAUF all gained over 2% on January 8.

STOXX Europe Total Market Aerospace & Defense year-to-date, source: STOXX

Meanwhile, the Danish government announced a boost in defense spending for Greenland. Danish Defense Minister Troels Lund Poulsen outlined as a package worth a “double-digit billion amount” in Danish krone, or at least $1.5 billion.

During a visit to Denmark in early January, Egede said that the Arctic territory was “entering a new era, in a new year where Greenland is in the center of the world.”

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