Donald Trump’s Greenland dream: How much would it really cost?

US President-elect Donald Trump’s interest in acquiring Greenland, an autonomous territory of Denmark, has raised questions about the island’s value. According to David Barker, a real estate developer and former economist at the New York Federal Reserve, the potential price for Greenland could range from $12.5 billion to as high as $77 billion.

This estimate, reported by The New York Times, is based on the costs associated with the US Virgin Islands and Alaska, adjusted for inflation and economic growth. Barker, who has experience evaluating large-scale real estate transactions, used these territories as benchmarks to arrive at his valuation.

Strategic and economic appeal

Greenland, which holds vast natural resources and occupies a strategically important position in the North Atlantic, has long been a subject of US interest. With a location vital to US defense infrastructure and a wealth of untapped resources, including minerals and fossil fuels, Greenland is seen as an important asset in the global geopolitical landscape.

Why does Trump want Greenland?

Greenland boasts mineral, oil, and natural gas reserves, though these resources remain underdeveloped due to slow progress in infrastructure development. The island’s economy is currently dependent on fishing, which accounts for over 95% of its exports, and annual subsidies from Denmark that cover half of Greenland’s public budget. In total, Denmark spends nearly $1 billion annually on Greenland, or roughly $17,500 per resident.

A recent survey revealed that 25 of 34 minerals identified by the European Commission as “critical raw materials” are found in Greenland, including rare earth elements essential for electric vehicles and wind turbines, as well as materials like graphite and lithium used in batteries.

Current US presence in Greenland

The US maintains a permanent military presence in Greenland through the Pituffik air base, located in the northwest. This arrangement stems from a 1951 agreement between the US and Denmark, granting the US the right to move freely and establish military bases in Greenland as long as Denmark and Greenland are notified.

Greenland’s status and desire for Autonomy

Greenland, a former Danish colony, became a formal territory of Denmark in 1953 and is subject to the Danish constitution. However, the island gained significant autonomy in 2009, with the right to declare independence through a referendum.

In the past, the US attempted to buy Greenland during the Cold War, offering $100 million in gold in 1946, but Denmark declined the offer. Trump’s 2019 proposal to purchase the island was also rejected by both Greenland and Denmark.

What if Greenland becomes independent?

Should Greenland choose independence, it could enter into a “free association” with the United States, similar to arrangements made with the Marshall Islands, Micronesia, and Palau. This would replace Denmark’s subsidies with US support and protection in exchange for military rights.

However, Gad warned that Greenlanders are not interested in being controlled by a new foreign power and would likely prioritize securing their welfare before pursuing independence.

Denmark’s response

Denmark firmly rejected Trump’s 2019 offer to purchase Greenland, with Prime Minister Mette Frederiksen calling it “absurd.” Regarding Trump’s renewed interest, Frederiksen reiterated that Denmark would continue its close cooperation with the US, but emphasized that Greenland should have the final say in determining its future.