Greenland and the End of Illusions in the Transatlantic Alliance

Executive Summary

Greenland has become a focal point of intensifying great-power competition between the United States, Russia, and China, while simultaneously triggering the most severe internal crisis in the transatlantic alliance since the Cold War. President Donald Trump’s renewed insistence that the United States must acquire Greenland—accompanied by threats of economic coercion against European allies—has transformed what was once a marginal diplomatic controversy into a systemic test of NATO, European strategic autonomy, and the rules-based international order.

Although Greenland’s strategic relevance is shaped by geography, natural resources, and climate change, the present crisis cannot be understood without reference to broader geopolitical dynamics. Russia seeks to consolidate military dominance across the Arctic littoral. China aims to secure long-term access to critical minerals and polar shipping routes as part of its global connectivity strategy. The United States increasingly frames Greenland as a linchpin in preventing Eurasian rivals from consolidating influence in the High North. Europe, caught between alliance loyalty and sovereignty defence, faces unprecedented pressure.

This policy brief argues that Greenland is not merely a territorial question but a manifestation of geoeconomic rivalry and alliance transformation. It illustrates the shift from cooperative security to transactional dominance and from multilateralism to coercive economic statecraft. While military annexation remains unlikely, the normalization of pressure against Denmark risks weakening NATO cohesion and emboldening authoritarian challengers. Europe must therefore respond through a calibrated mix of deterrence, legal clarity, and strategic investment in Arctic governance, while preserving cooperation with Washington on Ukraine and broader security priorities.

1. Greenland’s Strategic Value in a Multipolar Arctic

Greenland covers approximately 2.16 million square kilometres and hosts a population of just 56,000. Its strategic relevance is rooted in its position between North America and Eurasia. During the Cold War, Greenland functioned as a critical forward outpost for early warning systems against Soviet missile launches. Today, the Pituffik Space Base remains integral to the US missile defence architecture and to NORAD’s radar and satellite tracking systems.

Climate change has magnified this importance. Arctic sea ice has declined by roughly 13 percent per decade since satellite monitoring began in 1979. According to the Arctic Council, summer ice-free conditions may become routine by the 2030s. This development is transforming the Arctic into a navigable maritime space. The Northern Sea Route along Russia’s coast can reduce shipping distances between Shanghai and Rotterdam by approximately 40 percent compared to the Suez Canal. While Greenland lies west of this corridor, it occupies a strategic position near emerging transpolar routes that bypass Russian-controlled waters.

Greenland is also relevant in the global competition for critical raw materials. The US Geological Survey estimates that Greenland hosts some of the world’s largest undeveloped rare earth element deposits. Rare earths are essential for wind turbines, electric vehicles, semiconductors, and military technologies such as radar systems and missile guidance. China currently controls roughly 60 percent of global rare earth mining and over 85 percent of processing capacity. The EU imports around 98 percent of its rare earths from China, while the US relies on China for roughly 70 percent of its supply.

However, resource potential does not automatically translate into strategic leverage. Mining in Greenland is constrained by environmental regulations, permafrost, limited infrastructure, and high extraction costs. According to industry estimates, Arctic mining projects are two to three times more expensive than comparable projects in temperate climates. At present, only two commercial mining projects operate in Greenland, and several major ventures have been suspended due to financial and ecological concerns.

From a purely rational standpoint, the United States could secure access to Greenland’s strategic assets through existing agreements with Denmark and Greenlandic authorities. The insistence on sovereignty therefore reflects broader geopolitical motivations tied to great-power rivalry.

2. Russia’s Arctic Strategy and the Militarization of the High North

Russia has declared the Arctic a core national interest and has invested heavily in military and economic infrastructure along its northern coast. Approximately 20 percent of Russia’s GDP and over 70 percent of its oil and gas exports originate from Arctic regions. Since 2014, Moscow has reopened or built more than 50 military facilities north of the Arctic Circle, including airfields, radar stations, and missile bases.

Russia’s Northern Fleet, headquartered in Severomorsk, controls the majority of Russia’s sea-based nuclear deterrent. The fleet operates around 40 percent of Russia’s strategic submarines and has expanded its Arctic patrols. In 2024 alone, Russia conducted more than 30 major Arctic military exercises, involving strategic bombers and hypersonic missile tests.

Moscow also seeks to control Arctic maritime traffic. Under Russian law, foreign vessels must request permission to transit the Northern Sea Route and accept Russian pilotage. This legal claim is disputed by NATO states but increasingly enforced in practice. China has supported Russia’s position diplomatically, reinforcing a shared challenge to Western interpretations of freedom of navigation.

From Russia’s perspective, Greenland represents a potential vulnerability in NATO’s northern flank. If the United States were to destabilize relations with Denmark or Europe over Greenland, Russia would benefit strategically by weakening NATO unity. Russian media and diplomatic channels have consistently framed the crisis as evidence of Western hypocrisy on territorial sovereignty, drawing parallels with Crimea and Ukraine.

The Arctic is therefore not a peripheral theatre but an integral part of Russia’s deterrence posture and its global confrontation with the West.

3. China’s Arctic Ambitions and Resource Strategy

China defines itself as a “near-Arctic state” and has integrated polar governance into its Belt and Road Initiative through the concept of a “Polar Silk Road.” Chinese shipping company COSCO began experimental Arctic transits in 2013, and by 2024 had completed more than 40 commercial voyages through northern routes.

China’s interests in Greenland are primarily economic but have strategic implications. Between 2012 and 2019, Chinese firms attempted to invest in airports, mining projects, and infrastructure on the island. Although most initiatives were blocked by Danish authorities due to security concerns, Beijing retains interest in Greenlandic rare earths and uranium.

China currently processes the majority of global rare earths and has demonstrated willingness to weaponize supply chains, most notably in disputes with Japan and Lithuania. In 2025, China restricted exports of gallium and germanium to states aligned with US technology controls, illustrating how mineral dependency can be transformed into political leverage.

Beijing also views Arctic governance as an arena to reshape international norms. It supports a more inclusive Arctic regime that dilutes the influence of the Arctic Eight and legitimizes non-Arctic stakeholders. For China, Greenland offers not only minerals but also symbolic access to polar affairs traditionally dominated by Western states.

If the United States were to assert sovereignty over Greenland, China would likely portray the move as proof that territorial revisionism is not limited to authoritarian powers. This would weaken Western credibility when condemning Chinese actions in the South China Sea or Taiwan.

4. The US Turn to Geoeconomics and Coercive Alliance Management

The Greenland dispute reflects a broader transformation of US foreign policy toward geoeconomic coercion. Under Trump’s second term, tariffs and market access are used to extract political concessions. On 17 January 2026, Trump announced that imports from Denmark, Germany, France, the Netherlands, the UK, Norway, Sweden, and Finland would face a 10 percent tariff, rising to 25 percent by June unless an agreement was reached on “the complete and total purchase of Greenland.”

These eight countries account for approximately €520 billion in annual exports to the US, representing about 2.8 percent of EU GDP. Economic modelling by the Kiel Institute suggests that a 10 percent tariff would reduce EU GDP by around 0.04 percent and US GDP by 0.02 percent. A 25 percent tariff would double those figures. The economic damage is therefore manageable, but the political precedent is not.

The use of tariffs to force territorial concessions marks a radical departure from alliance norms. It signals a shift from collective security to transactional hierarchy. The logic is explicitly mercantilist: Greenland is framed as an asset whose control will generate wealth, minerals, and leverage over China and Russia.

This approach risks transforming NATO from a community of defence into a system of dependency. It also undermines US claims to defend sovereignty and territorial integrity elsewhere, especially in Ukraine and the Indo-Pacific.

5. Europe’s Strategic Dilemma

European responses have been forceful in rhetoric but cautious in substance. France, Germany, and Denmark have condemned US pressure as intimidation. The EU has explored retaliation using its €93 billion counter-tariff list and its Anti-Coercion Instrument, adopted in 2023 to counter economic coercion.

However, Europe’s dependence on US military assets limits escalation. The US supplies key intelligence, satellite reconnaissance, and missile defence components used to support Ukraine. Europe purchases approximately 60 percent of its advanced air-defence interceptors from US manufacturers. Retaliation over Greenland could therefore weaken Europe’s own security posture.

Internal divisions further complicate matters. Poland and Hungary have expressed reluctance to confront Washington. Britain must balance its bilateral trade agreement with the US against solidarity with Europe. Germany and France advocate firmness but fear a trade war.

This reveals a structural asymmetry. Europe remains an economic superpower but a military dependent. The Greenland crisis exposes the strategic cost of that imbalance.

6. International Law, NATO, and Alliance Credibility

From the standpoint of international law, any forcible acquisition of Greenland would constitute aggression under Article 2(4) of the UN Charter and violate the principle of self-determination. Territorial conquest is prohibited, and any annexation would be legally void.

Denmark would have the right to self-defence under Article 51 of the Charter and could request collective assistance. NATO’s Article 5 would theoretically apply even if the attacker were a member state, since the treaty does not exempt internal aggression. Politically, however, NATO was never designed to deter its hegemon.

The EU’s mutual assistance clause under Article 42(7) TEU could be invoked, though its applicability to Greenland remains legally contested because Greenland is an Overseas Country and Territory rather than EU territory. Regardless of interpretation, the central issue would be political will, not legal nuance.

If the United States were to use force against Greenland, NATO’s normative foundation would collapse. Even without force, sustained coercion already weakens alliance trust and credibility.

7. Greenland’s Agency and Local Constraints

Greenlanders overwhelmingly oppose integration into the United States. A 2025 poll showed that 85 percent rejected becoming part of the US. Roughly 90 percent of Greenland’s population is Inuit, and political identity is closely tied to indigenous self-rule and environmental protection.

Greenland remains economically dependent on Denmark, which provides approximately $700 million annually in subsidies, equal to around 20 percent of Greenland’s GDP. Public employment accounts for nearly half of all jobs. This dependence limits Greenland’s immediate capacity for economic diversification and makes EU and Danish support critical.

Any attempt to bypass local consent would violate Greenland’s legal right to self-determination and reinforce perceptions of neo-imperialism.

8. Strategic Implications

The Greenland crisis illustrates three structural trends. First, alliance relations are becoming conditional on political compliance. Second, geoeconomics is replacing multilateralism as a tool of influence. Third, Europe’s strategic vulnerability is no longer abstract but immediate.

Russia benefits from any weakening of NATO cohesion. China gains rhetorical ammunition against Western claims of rule-based order. The United States risks losing moral authority while pursuing marginal strategic gains.

Greenland thus functions as a stress test for Arctic governance, NATO solidarity, and the EU’s capacity to act as a geoeconomic power.

Conclusion

Greenland is not simply about minerals or missile radars. It is about the future of alliance politics in an era of great-power rivalry and geoeconomic coercion. The United States may never annex Greenland, but the normalization of pressure against Denmark already damages trust, law, and institutional credibility.

Europe must pursue a calibrated strategy that combines legal clarity, economic preparedness, and strategic investment in Arctic security while preserving cooperation with Washington on Ukraine and deterrence against Russia. Failure to respond coherently will encourage authoritarian challengers and weaken the very principles Europe seeks to defend.

Greenland has become the symbol of a deeper transformation: from partnership to pressure, from law to leverage, and from alliance to transaction. How this crisis is managed will shape not only Arctic security but the long-term structure of the transatlantic relationship.

The United States may yet gain influence over an island. In doing so, it risks losing the trust of a continent.