Trump's Greenland gambit: Tariffs loom over Denmark deal

The world's largest island, inhabited by only about 58,000 people, has captured global interest. This is all due to Donald Trump's announcements. The President-elect declared that the USA would buy Greenland, an autonomous territory of Denmark.

Americans considered purchasing Greenland during Abraham Lincoln's presidency in the 19th century. At that time, the idea was abandoned, partly due to the belief that there were no attractive resources on the island.

Meanwhile, Greenland holds enormous geopolitical and energy significance. "Of the 34 resources identified by the European Commission as strategically important for Europe's industry and green transformation, 25 can be mined in satisfactory quantities in Greenland," wrote Jakub Wiech from energetyka24.com on the X platform.

In 1946, the USA offered Denmark $100 million for the island. Just six years ago, Trump offered money for Greenland. Now he warns that he will impose high tariffs on Denmark if it does not sell the island.

"Trump wants to provoke a trade war. Introducing tariffs is one of his main election promises, but according to the current Trade Act of 1974, the President does not have unilateral authority to manipulate tariffs. The exception is a provision allowing the President to take all necessary actions to combat policies burdening US trade," says Rafał Michalski.

This means that if the US President assesses that an economic practice of a third country threatens the country's trade, he can do whatever is necessary to remove that burden.

"Trump invoked this provision during his first term and the trade war with China. He claimed that Beijing's economic practices burden US trade, which is why he, as President, can manipulate tariffs to avert this danger. However, this provision does not function effectively, at least in the context of European allies," evaluates Michalski.

In this context, Greenland and the threats of imposing tariffs on Denmark come into play.

If Trump starts to suggest in the media that he broadly understands the definition of a threat to US interests, he may consider that the lack of full access to this island threatens national security," explains the Americanist.

This security could be threatened by, for instance, Russian and Chinese ships sailing in the Norwegian Sea. Trump assessed that the USA needs Greenland for national security. "It is for the free world. I'm talking about protecting the free world. You look - you don't even need binoculars - outside and you see all the ships from China. You have Russian ships everywhere. We will not allow it," Trump stated.

According to Dr Michał Kuź from Łazarski University, Trump is employing the doctrine of the so-called unpredictable leader in this case. He wants to create the impression that he is willing to take drastic steps to come out from a stronger negotiating position at the start.

"These are actions characteristic of aggressive business behind closed doors. However, they cause a stir when used in diplomacy. Trump's style is transactional – characterised by low trust in international institutions and a preference for bilateral agreements. For him, politics is a business where negotiations begin with a firm stance, to later lower the price. This is how he talks with partners. Meanwhile, he often compliments adversaries, which costs nothing, and then sets tough conditions," explains the international relations expert.

That's why even before being sworn in, Trump threatened to impose tariffs not only on Denmark but primarily on China, Canada, Mexico, the EU, and BRICS countries. He also believes that Panama charges too high fees for using the Panama Canal.

"When talking about Canada, Greenland, and Mexico, Trump returns to the Monroe Doctrine, assuming that the entire geographic zone of the Americas should be a special sphere of influence for the USA, including Greenland due to its continental shelf formation," adds Kuź.

However, Greenland is the foothold regarding Mexico, where the Republican's focus is turned. Trump recalls the "Alien and Enemies Acts" from the 18th century, which limited immigration.

The President can declare a state of emergency due to illegal immigration from Mexico, which Trump considers an invasion of a foreign army, and thereby use, for example, the military to carry out deportations," evaluates Michalski.

The Americanist notes that Trump is eyeing Arizona, North Carolina, or Texas, which suffered after the implementation of the NAFTA free trade agreement. "Uncontrolled import of agricultural products from Mexico began, leading to industrial collapse. The provinces in the south of the country lost a lot. Trump knows this, he has his voters there. And they want specific and strong regulations in some sectors of the economy. Trump is looking for a pretext to invoke these exceptional rules and will constantly talk about the threat, " believes Michalski.

Around Greenland, these threats are manifested by Chinese and Russian ships, while from Canada and Mexico, immigrants and drugs, especially fentanyl, are supplied to the USA.

According to Politico, the tariffs proposed by Trump on Canada and Mexico could affect goods worth over £710 billion. This concerns cars, their parts, and the energy sector. "Both countries account for nearly one-third of US imports of goods, which last year amounted to approximately £2.4 trillion."

Trump jokes that Canada will become the 51st state of the USA, but undoubtedly he can exert economic pressure on the neighbour because he is prone to concessions.

- Trump talks about universal tariffs, but even in the first term, he often took a step back. At that time, the states of New England asked him to exclude products from higher tariffs for their key steel industry. And he did," Michalski recalls.

Unexpectedly, Mark Zuckerberg joined Trump's team, at least for a while. Meta's founder announced that Meta is ending its fact-checking programme with partners and will introduce a system of community notes similar to those of Elon's X platform. Meanwhile, he will transfer content moderators from leftist California to Republican Texas.

"The decision to change the approach to content moderation results from Meta's criticism from Republicans, who believed that the fact-checking system favoured Democrats. The new system, similar to the one used by X, is supposed to be more open to different opinions from the community," reported finanse.wp.pl.

Zuckerberg sensed where the wind was blowing and is trying to approach Trump's administration. Only in the last few days, Meta announced that Joel Kaplan, a Republican lobbyist, will become the head of global policy for the giant, and Trump's friend and former UFC head (an MMA organisation) Dana White, joined the board.

The head of Meta has issues with the EU. Last autumn, the European Commission fined Meta nearly 800 million euros for unfair trade practices on the Facebook Marketplace platform. Google and Apple are also on Brussels' radar. Musk's influence on Trump could lead the White House to fight in the EU for the interests of Silicon Valley giants. Trump has already warned Brussels that he will impose tariffs on its goods if it does not increase purchases of American oil and gas. And the USA is the largest producer of oil and LNG exporter.

"The EU will compromise because it will be forced to. Brussels has not developed its digital technology or social media centres. No one will suddenly shut down Twitter. China has TikTok, and Russia has Telegram. Even Blue Sky, an alternative to X, is American," believes Kuź.

The expert assesses that by negotiating with Trump, the EU will have to propose deregulations in the social media market, increase purchases of oil and gas from the USA, and increase defence spending.

"The EU is trying to implement data protection regulations, so Trump may state that his administration opposes regulations for their capital and see it as burdening United States trade. This outlines a potential economic conflict with the EU," adds Michalski.

Our two interlocutors underline how important transactional approaches are in Trump's politics. In the coming years, Argentina, where Elon Musk-admired Javier Milei governs, may benefit from cooperation with his administration.

"Trump understands tough business, but he should not be insulted. I wouldn't want to be in the same room with Trump and Donald Tusk, who said Trump is a Russian agent. If they even talk at all," Kuź concludes.

Piotr Bera