Greenland: independence and growing geopolitical interest

Donald Trump's recent statements, in which he did not rule out economic or military measures to take control of Greenland, have once again put the territory in the spotlight. These remarks have sparked reactions from the prime ministers of Denmark and Greenland, as well as other European and NATO leaders. This raises a key question: What does Trump want, and why is Greenland so strategic for him?

Greenland: an economy highly dependent on fishing and danish support

With a population of just under 60,000, Greenland has a small, autonomous economy within the Kingdom of Denmark, alongside the Faroe Islands. While it manages most of its internal affairs under its "Home Rule" system, Denmark retains control over major areas such as defense, monetary policy, and citizenship. All Greenlanders are Danish citizens with the same rights as those living in Denmark.

The economy is primarily based on the fishing industry, a growing tourism sector, and limited mining activities. The public sector accounts for approximately 50% of employment. Additionally, Greenland heavily relies on financial support from Denmark through the “bloktilskud,” a subsidy that covers nearly half of its public revenues. In trade, Denmark absorbs 50% of Greenland’s exports and supplies 60% of its imports.

April 2025 elections and referendum: the question of independence

Greenland will hold local elections in April 2025, with independence expected to be a central issue. At the same time, a referendum on the territory’s future could be organized, although the exact terms are still being defined.

Múte B. Egede, the current Prime Minister and leader of the pro-independence Inuit Ataqatigiit party, announced in his New Year's speech that the next legislature would establish a commission to oversee this referendum. This follows the 2023 creation of a committee tasked with drafting a Greenlandic constitution, which would take effect if the country gains independence.

If the referendum commission successfully defines the framework, a vote could take place. If a majority votes for independence, the Danish Parliament would have to approve it—a likely scenario, though Denmark has recently sought support from European partners amid increasing U.S. pressure over Greenland.

Independence remains a popular idea. In 2016, 64% of Greenlanders considered it "fairly important"[1]. However, in 2017, nearly 80% of citizens and political leaders feared a decline in living standards if independence meant losing Danish financial support [2].

Several key issues remain unresolved, including monetary policy, infrastructure, and skilled labor. Even if a referendum is held, independence in the short term seems unlikely. Even in 2025, most political parties—including Naleraq, the most pro-independence party—are reluctant to set a date for a vote.

Why is Trump interested in Greenland?

Greenland has gained growing geopolitical significance, particularly as Chinese investments in mining and infrastructure have raised U.S. concerns.

From an American perspective, Greenland is crucial for three main reasons: defense, trade, and critical minerals.

Greenland is particularly important from an American point of view from three main avenues: defence, trade, and critical minerals.

comments Jonathan Steenberg, economist at Coface for Northern Europe.

Defense

Although geographically part of North America, Greenland is just 2,000 km from both Maine and mainland Russia. The U.S. already has a military presence there, notably the Pituffik Space Base, which has been used for surveillance and early warning systems since the 1940s.

Trade

With rising temperatures in the Arctic, new shipping routes could open, reducing travel time between East Asia and Europe by nearly a third. This would increase Greenland’s geopolitical importance, as it would gain control over access to its waters and, by extension, global trade routes.

Rare Minerals and Natural Resources

Greenland possesses 25 of the 34 critical minerals listed by the European Commission. However, extreme weather conditions and high extraction costs have so far limited large-scale mining operations. Internal policies also constrain resource exploitation: in 2021, Greenland passed a law banning new licenses for oil and gas exploration, as well as uranium mining.

In December 2024, Donald Trump reiterated his proposal to acquire Greenland, calling it “an absolute necessity” for U.S. national security. In January 2025, he refused to rule out economic or military measures to take control of the island, escalating tensions with Denmark and the European Union.

If a vote in favor of independence were to take place within the next decade, Greenland would likely need to align with a larger nation. While a free association agreement with Denmark is an option, partnerships with other powers—such as the United States or China—could also be on the table.

 

[1] Massivt flertal for selvstændighed

[1] Redaktør: Grønlændere vil ikke ofre levestandard for selvstændighed | Indland | DR

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