Denmark, Don't Worry...

Negotiate and Win!

The one thing you can say about Donald Trump is that he likes to negotiate. Everything is on the table. And, he’s a master persuader - twice elected as the US President - there is no denying that he is able to move the opinion of millions of people.

The last several weeks Trump has declared his love for Greenland. To many, the comments were out of the left-field, disjointed. I agree - they were. But there is a larger context that provides Denmark an opportunity.

Beyond all the hyperbolic language, the United States and Europe have a problem with China and Russia. China’s navy is expanding its reach into the Arctic and has defined itself as a “near-Arctic state” with an emphasis on a “Polar Silk Road.” Russia has claimed portions of the Arctic Sea including stretches inside of Greenland’s Exclusive Economic Zone.

And the increased presence of Chinese and Russian ships in vital shipping lanes is already a problem. Sabotage of underwater infrastructure such as fiber optic cables, transmission cables, and pipelines by Russian and Chinese ships grows each year.

Last November, the Chinese vessel Yi Peng 3 damaged two fiber-optics undersea cables in the Baltic Sea. Denmark’s Navy monitored and eventually stopped the ship. But this situation is not unique.

Czech Foreign Minister Jan Lipavsky recently described the problem:

“There have been 500 suspicious incidents in Europe this year [2024]. Up to 100 of them can be attributed to Russian hybrid attacks, espionage and influence peddling.” (Reuters)

Shipping lanes are only part of concern. Greenland has a remarkable amount of natural resources, including rare earth minerals that are needed in renewable energy generation and storage. And if the ice caps recede as predicted, Greenland’s minerals could be extracted with relative ease.

The pending conflagration will need to be addressed sooner rather than later. And Greenland will be pivotal to limiting the Chinese and Russian military aggression.

Now back to the Trump - Denmark row. Greenland is part of the Kingdom of Denmark along with the Faroe Islands. But in 2009 an agreement with Denmark allowed Greenland to self-rule - basically Greenland can run its internal affairs while Denmark maintains the defense and foreign affairs. Denmark sends Greenland roughly $600M yearly as a block grant which funds about half of the Greenland’s yearly government spending. Importantly, Greenland can also vote to separate from Denmark as part of the 2009 agreement.

Shaking the Box

So Trump is trying to deter China and Russia in the Arctic. Greenland is beautiful bargaining chip. That provides Denmark with a great deal of leverage. And Denmark should use it.

Trump will initiate by using a technique called “shaking the box.” It’s a persuasive negotiating technique that ignores precedence, agreements, and conventional logic. The goal is to get the opposing party to the negotiating table because the threats, although difficult to implement, are theoretically possible. Example - tariffs on Denmark. The vast majority of the US would be against this move and it would be nearly impossible to enact.

But Denmark could negotiate with the US to help limit China and Russia movements. A joint Denmark - US naval base in Greenland would be a straightforward move. Here are a few of the opportunities that Denmark could extract for that agreement:

1 - Denmark could ask for billions of dollars to support the joint naval efforts and likely get it. It would be less expensive for the US than operating a base on their own, and Denmark could reinforce its navy with the US funds.

2 - Denmark could ask Trump to stand down on the verbal pummeling of wind energy in the US and lower the barriers for Danish companies to export products to the US. I think that Trump’s feigned disgust of offshore wind is, in part, another tactic to bring Denmark to the table regarding Greenland.

3 - Denmark could impose a tariff on Greenland products, minerals, and natural resources that are exported the US. The US would rather acquire rare earth minerals from Denmark/Greenland than China and would likely pay for the privilege.

Or, Denmark could just wait about 18 months and all of this will pass. US political movements are short-lived.

Stay charged!

Allen

Image: Grok