American Greenland and Panama: truth or fantasy?

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Donald Trump is “rubbing his hands” as he prepares to sweep Greenland with its resource deposits and Panama for control of the shipping channel. This would be a major blow to China’s influence. But it will be difficult for the US to “expand its territories”, and it will have to resort to economic pressure and blackmail. And in the case of Greenland, even a military scenario is possible.

The global political crisis “opens the door” for the US

Donald Trump‘s desire to annex Greenland seemed to many to be a manifestation of provocative eccentricity or a crazy idea of a “right-wing tyrant”. But in reality, it is a well-thought-out plan that he has been trying to implement since his first term. In 2019, Donald Trump has been discussing with his advisers the possibility of carrying out the largest US operation in decades to buy Greenland.

The Trump administration sees Greenland as a successful beachhead for enhancing US military security, and as an excellent economic development project because of the large amount of resources on the island. Greenland is home to the US military’s Thule Air Base, which monitors any missile launches in the North Atlantic. Some time ago, China tried to buy for nothing several abandoned airports in Greenland to create their own bases, but the Danes turned them down. Nevertheless, the White House was concerned about the activity of Chinese mining companies, which get a lot of contracts for work in Greenland. In addition, the Danish government meets the PRC’s needs because there is no financial capacity to develop the island on its own. Despite its natural riches, Greenland remains an unprofitable and subsidized part of Denmark, spending €590 million a year on its needs as subsidies. In addition, a large part of the island’s population has no permanent jobs and is engaged in the most primitive fisheries, which is justified by the liberal slogans of care for “indigenous culture”.

An aerial view of Thule Air Base.
*Photo by Icy Seas*

Six years earlier, the purchase of the island was impossible because of Denmark’s position. And then Joe Biden came to power, who maintained excellent relations with the liberal authorities in Copenhagen and did not want to realize such bold projects. But the world economy is now on the threshold of recession, and many EU countries are already in a technical recession. And the further it worsens, the more the Danes will have doubts about the need to keep unprofitable Greenland as part of their kingdom. And Trump’s accession to power in 2025, when the world was already in the conditions of “Cold War 2.0” and the EU economy sagged even more, made this issue relevant again. Yes, and with regard to the Europeans, the new American has chosen offensive pressure tactics.

Therefore, it is not surprising that even before the inauguration, Trump went back to his first term ideas like buying Greenland. In addition, he promised to bring the Panama Canal back under US control, which triggered a diplomatic crisis. The topics of Panama and Greenland overlap, as in both cases Trump is concerned about China’s growing influence. Hong Kong-based companies own two of the five ports next to the Panama Canal. Trump’s advisers believe this violates the US agreement with Panama on the canal’s neutral status. Greenland is also targeted by Chinese companies that want to mine rare earth metals and uranium there, although this runs counter to the local authorities, who want to ban mining all at once for environmental reasons. But now the Europeans are under intense pressure from Trump in trade wars. That’s why Greenland may have to make concessions and give Americans access to its market. The same goes for Panama, from which Trump expects cooperation in the fight against migrant flows and preferential treatment for Americans when using the canal.

Unobvious benefits for Greenland

Greenland’s transformation into an arena of confrontation between the United States and the European Union opens up new opportunities for Greenland. Local authorities are already anticipating investments from the United States, which could replace Denmark’s financial aid of €500 million a year. But the Europeans are clearly not going to be left out either. Brussels will have to promise Greenland more investments to stop the island from drifting into the US sphere of influence. After all, there is a lot to share on the island, it has the largest rare earth deposits and oil reserves of 110 billion barrels.

The Trump administration will surely want to lease the main deposits within the framework of future agreements, even if the purchase of the entire island does not happen. The main losers will probably be the Danes, because the growth of Greenland’s economy due to the inflow of foreign investment will strengthen the position of the supporters of the island’s independence, and they are now in the political mainstream. In addition, Denmark will simultaneously face a serious round of trade war with the United States on the background of the conflict over Greenland. After all, there is another important economic component: Danish pharmaceutical corporations earn tens of billions from the sale of their weight loss products in the United States. Their popularity is sure to grow in the near future against the backdrop of Trump’s team’s plans to fight the obesity epidemic in the country. And now, under the talk of Greenland, it is possible to impose taxes and tariffs on Danish corporations at the same time. And there is nothing Copenhagen can do about it, all that will be left is to quietly tolerate Washington’s political dominance over weak Brussels.

Greenland invasion scenario

NATO military experts have experimentally assessed the prospects for a US invasion of Greenland if Trump fails to reach an agreement with Denmark. They recognize that the military operation will turn out to be quite simple for the Pentagon, but the consequence will be the most serious crisis in the history of NATO.

According to the theoretical model, the US would fail the negotiations on March 30, 2025. The response would be a landing of US Marines at the airport of Greenland’s capital. It will take control of the main infrastructure facilities, disarm the local police and declare a curfew. The Danes, who don’t really know what’s going on, call an emergency NATO meeting and try to invoke Article 5 of the charter. But the US representative and Trump loyalist from Iowa will veto it. Copenhagen will only have to beg the UK to send at least one of its two aircraft carriers to show a semblance of force. But London will refuse, announcing yet another breakdown of aircraft carriers that there is really no one to accompany them on a long-distance voyage. Finland, Norway, Poland, Sweden and Denmark will form an anti-Trump alliance, provoking the White House to impose sanctions on all of Northern Europe and threats to pull the US out of NATO. Canada will close its border with the U.S. and prepare for a round of military escalation with Trump.

Certainly, such a scenario seems fantastical for the time being. Trump is more likely to succeed in pressuring Denmark to negotiate and gain access to Greenland’s rare earth deposits without the use of force. But the Greenland conflict is just one of the first NATO crises that will manifest itself under Trump, and given his grand plans to reformat the alliance, NATO’s future is becoming very murky indeed because of systemic contradictions with European liberals.

Denmark is looking for compromises

If we turn to the situation inside America itself, the topic of territorial expansion, as always, has split the United States. About a third of conservative Americans support the annexation of Greenland and the return of control over the Panama Canal, while a third of liberals oppose such a violation of international law, and the rest are concerned about more down-to-earth problems such as rising inflation and migration. At the same time, Denmark is trying to start negotiations with Trump’s team on joint development of Greenland, as it does not want to wage war over the island as much as it does not want to surrender its position in the Arctic. Greenland itself is also divided, with two-thirds of the population favoring cooperation with Europe, although the rest, primarily the indigenous Eskimos, are willing to cooperate with the US.

The local authorities are again using the topic of independence to increase their ratings, but they are not making any real steps in this direction. The fact is that independence is good in theory, but in practice it would mean losing generous subsidies from Denmark, which exceed a quarter of the island’s economy. Therefore, it is more profitable to continue to stigmatize the colonizers, while receiving reparations from them in the form of subsidies and looking for new patrons from the United States with investments. Now Greenlanders have an opportunity to play on the contradictions of Washington, Brussels and Copenhagen, attracting external tranches from different sources. And to some of them, or maybe all of them at once, they will eventually lease for a high price their major deposits of rare earth metals and oil.

But “Cold War 2.0” puts expediency above “lowly” profit, and such terms can now be accepted. In such a case, Denmark will also hope to soften the blow to itself from the trade war with Trump with its “goodwill gesture”. However, it is far from certain that this will help, because Danish companies make too much money with their weight loss products on the American market.

So Greenland is important, of course, but Trump is unlikely to give up the opportunity to “strangle” Denmark with tariffs. Nor will Trump give up the struggle for control over the Panama Canal, although its accession by force, as in the case of Greenland, is ephemeral. Although American Greenland and American Panama still have a chance to become a reality in the new unpredictable world of “Cold War 2.0”, which every year gives us “surprises” related to aggression, instability or violence.