Trump's tariffs and the Greenland gambit: A geopolitical play

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

Americans considered purchasing Greenland during Abraham Lincoln's presidency in the 19th century. At that time, the plan was abandoned, partly because it was believed there were no attractive resources on the island.

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

In 1946, the USA offered Denmark 100 million dollars for the island. Just six years ago, Trump proposed buying 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. However, there is an exception that allows the President to take necessary actions against policies that burden US trade," says Rafał Michalski.

This means that if the US President believes an economic practice by a third country threatens the country's trade, he can do everything possible to alleviate that burden.

"Trump invoked this provision during his first term, especially in the trade war with China. He claimed Beijing's economic practices burden US trade, so as President, he could manipulate tariffs to counter this threat. However, this provision is not effective, at least regarding European allies," Michalski explains.

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

If Trump begins suggesting in the media that he broadly interprets what constitutes a threat to US interests, he may argue that the lack of full access to the island threatens national security, explains the Americanist.

This security concern could be due to Russian and Chinese ships in the Norwegian Sea. Trump has assessed that the USA needs Greenland for national security. "It's for the free world. I'm talking about protecting the free world. You don't even need binoculars to see all the ships from China. Russian ships are everywhere. We will not allow it," Trump stated.

According to Dr. Michał Kuź from Łazarski University, Trump is using the doctrine of the so-called unpredictable leader in this instance. He wishes to create the impression that he is willing to take extreme measures to strengthen his negotiating position from the outset.

"These actions are characteristic of aggressive business negotiations behind closed doors but cause a stir when applied in diplomacy. Trump's style is transactional – marked by low trust in international institutions and a preference for bilateral agreements. For him, politics is business, starting with a tough stance and later lowering the price. That's how he communicates with partners. Simultaneously, he often flatters adversaries, which costs nothing and then sets strict conditions," explains the international relations expert.

This is 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 feels that Panama charges excessive fees for using the Panama Canal.

"When discussing Canada, Greenland, and Mexico, Trump refers to the Monroe Doctrine, suggesting that the entire geographic zone of the Americas should be a special sphere of influence for the USA, including Greenland because of its continental shelf formation," adds Kuź.

However, Greenland is a focal point regarding Mexico, where the Republican's attention has been turned. Trump recalls the "Alien and Enemies Acts" from the 18th century, which restricted immigration.

The President can declare a state of emergency due to illegal immigration from Mexico, which Trump considers an invasion of a foreign army. This could allow him to use measures, such as the military, to carry out deportations, evaluates Michalski.

The Americanist highlights that Trump is focusing on Arizona, North Carolina, and Texas, areas negatively affected by the NAFTA free trade agreement. "Uncontrolled importation of agricultural products from Mexico began, leading to industrial decline. These southern states suffered greatly. Trump is aware of this, as his supporters are there, and they demand strong regulations in some economic sectors. Trump seeks a pretext to invoke these exceptional rules and will persistently discuss the threat," believes Michalski.

Around Greenland, it's Chinese and Russian ships, and 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 1.2 trillion Canadian dollars (CAD). This involves automobiles, their parts, and the energy sector. "Both countries contribute to nearly one-third of US goods imports, amounting to approximately 4.1 trillion CAD last year."

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

"Trump talks about universal tariffs, but even in his first term, he often retreated. Back then, New England states requested him to exclude products from higher tariffs, important for their key steel industry. And he consented," 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 program with partners and will introduce a system of community notes similar to those on 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, intends to be more open to diverse community opinions," reported finanse.wp.pl.

Zuckerberg noticed the political winds shifting and tried aligning with Trump's administration. Recently, Meta announced that Joel Kaplan, a Republican lobbyist, will oversee global policy for the giant, and Trump's friend and former UFC head Dana White joined the board.

The head of Meta has challenges with the EU. Last fall, the European Commission fined Meta nearly 1.2 billion CAD for unfair trade practices on the Facebook Marketplace platform. Google and Apple are also under scrutiny by Brussels. Musk's influence on Trump could prompt the White House to fight for Silicon Valley giants' interests in the EU. Trump has already warned Brussels that he will impose tariffs on its goods if it does not increase purchases of American oil and gas. The USA remains the largest oil producer and LNG exporter.

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

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

"The EU aims to implement data protection regulations, so Trump might argue that his administration opposes regulations for its capital and view it as a trade burden for the United States. This sets the stage for potential economic conflict with the EU," adds Michalski.

Both of our interlocutors emphasize the transactional approach fundamental to Trump's politics. Argentina, where the Elon Musk-admired Javier Milei governs, might benefit from cooperation with his administration in the coming years.

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

Piotr Bera