Since President Donald Trump’s return to the White House, there has been a growing unrest due to Greenland’s strategic military significance in relation to geopolitical conflicts.

Breakdown:

Historically, during WW2, the Danish ambassador agreed that the U.S. should occupy Greenland and construct military bases to prevent a German occupation. America built its northernmost military base at Pituffik. Over 10,000 U.S. fighters and bombers landed in Greenland during WW2 to resupply on their way to Europe. In 1946, the U.S. offered Denmark $100 million to purchase Greenland, however the offer was refused. 

After joining NATO both countries signed the 1951 Greenland Defence Agreement, which is still effective today. The island is approximately 50% of Europe’s size, meaning it is difficult for Danish troops to ensure complete surveillance with troops patrolling on dog sled and very few navy ships along its coast. 

Consequently, Denmark has relied on extensive U.S. cooperation and support. However, this has fuelled President Trump’s ambition of acquiring Greenland, because it represents a key naval chokepoint. The route between Greenland, Iceland and the United Kingdom (GIUK) is essential for NATO intelligence, allowing Russian vessels and submarines operating in the Arctic region to be monitored and contained.

Economic impact:

Greenland is a gateway to Arctic shipping routes. On February 12th, 2025, a U.S. Senate hearing outlined that coast of Greenland was rich in mineral resources which are very rare. Whilst hosting precious metals, base metals and industrial rocks, the exploration of such commodities is incredibly challenging due to rough terrain, including deep fjords, glaciers and icy mountain ranges, a testament to the island’s harsh climate and inaccessible terrain. Therefore, any form of extraction is extremely expensive requiring complex infrastructure investments. 

Only major economies like the U.S. could afford to incur such costs. As climate change continues, the ice sheet surrounding Greenland is melting and many U.S. companies view this as an unprecedented economic opportunity to access new shipping routes and facilitate international trade. 

The three main routes of interest are: The Northwest Passage, Northen Sea Route, and Transpolar Sea Route. They are a time and cost-effective alternative to the Suez Canal reducing shipping time between Asia, Europe, and the Americas. Currently, the fishing industry is Greenland’s main economic source, but it also relies on Denmark’s annual 500-million-euro grant. This accounts for 50% of the island’s budget, allowing the government to spend around 10,000 euros per Greenland resident. 

Legal implications:

Law firms would:

  • Draft a new international treaty between the U.S., Greenland and Denmark. This would require consent by a referendum in Greenland.
  • Structure financial compensation for Denmark whilst also establishing a new trade deal between the Greenland and the U.S.
  • Manage and negotiation the transfer of property rights and exploitation licenses for companies operating in Greenland.
  • Organise Investor-State Dispute Settlements (ISDS) for foreign companies operating in Greenland, allowing them to sue the U.S. government for actions affecting their investments. 

U.S. Law firms would be required to advise on U.S. constitutional law, because the treaty would require approval by the U.S. Senate. 

Future Outlook: 

It remains to be seen how the increased commerce in the region will impact the island’s 57,000 inhabitants, 84% of which seek independence, viewing the U.S. and EU as solely strategic partners.