Investors have known for years that President Trump’s twitter comments should be watched closely but taken with a grain of salt at times. However, markets didn’t know how to react when news came out that Trump has been flirting with the idea of buying out the autonomous Danish territory of Greenland.
The Wall Street Journal first covered the story on Thursday, where people familiar with the matter reported that the President has considered making a deal to acquire Greenland. In meetings, dinners, and a number of passing conversations, President Trump asked his advisors whether the U.S. can buy Greenland from Denmark while listening as they discuss its abundant natural resources and geopolitical importance.
According to two of the anonymous sources that contributed to the story, Trump has asked his White House counsel to look into the idea further.
While the report said that Trump’s interest in the possibility had “varying degrees of seriousness” the article went on to state the President had brought the topic up repeatedly, so it wasn’t a one-time passing thought. Sources told the Journal that Trump would see Greenland as another Alaska-like purchase that would expand America’s reach while also cementing his legacy.
As for those close to him, some of his advisers supported the idea, saying it was a good long-term economic investment, while others dismissed it as a temporary fascination that would never become reality. Even if the Trump administration was serious about buying out Greenland, it’s unclear exactly how the process would look like in the first place.
Denmark’s population comes in at only 56,000, as Greenland is a self-ruling part of Denmark. While Greenland handles its own domestic matters, foreign and security policy is run in Copenhagen. Interestingly enough, Trump is scheduled to make his first visit to Denmark sometime next month, although the trip is supposedly unrelated.
The State Department and the White House declined to comment, while officials in the Danish embassy in Washington nor Denmark’s Royal House responded to requests for comments. The idea behind acquiring Denmark comes both from an economic perspective as well from a security standpoint.
A decades-old defense treaty between Denmark and the U.S. gives the U.S. Military almost unlimited rights in Greenland to operate their northernmost military base, Thule Air Base. At the same time, the U.S. has fought to derail Chinese efforts to gain an economic foothold in Greenland, blocking China from financing three airports on the island back in 2018.
From an economic perspective, Greenland has a vast quantity of natural resources across its 811,000 square miles. However, the territory relies on $591 million worth of annual subsidies from Denmark which comprise around 60 percent of its annual budget. Trump suggested that due to these financial troubles, buying out the island could be a potential play.
“What do you guys think about that?” Trump asked the room according to the sources in a round table last spring. “Do you think it would work?”
Historically, America had previously extended an offer to buy Greenland from Denmark. Back in 1946, President Harry Truman offered to buy it from the European country for $100 million but the offer was declined. Going even farther back, the State Department launched an inquiry about buying both Greenland and Iceland back in 1867, an offer that didn’t work out even back then.
It’s likely that nothing will come from this line of thinking, but investors aren’t sure what to make of the curious revelation one way or the other.
