Executive Summary

• Trump sees Greenland as essential for National Security. His comments about using tariffs to force Denmark to sell the island set off a storm of controversy in Europe. 
• Trump claims China is running the Panama Canal and vows to “take it back”. Claims of price gouging against US shipping are unsupported by available facts.
• Trump has ruled out military action against Canada but his threat of up to a 25% tariff unless changes are made to the border appear to be real

Why Greenland?

Greenland is an autonomous territory of Denmark, a NATO member and consequently a United States ally.  In 2018 the Geological Survey of Denmark and Greenland authored an engineering study of Rare Earth Element (REE) potential in Greenland.  As of that date, eight REE deposits have been identified, two of which may be among the ten largest REE deposits in the world.[1]  In 2007 and Australian owned company, Energy Transition Minerals’ subsidiary Greenland Minerals (GM) began operations under an exploration license to evaluate the REEs in the Kvanefjeld area and evaluate future mining operations.

GM planned to create an open pit on Kvanefjeld and dispose of toxic and radioactive wastewater in a dammed reservoir.  This was highly controversial; similar dams have collapsed, often with devastating consequences to the environment.  Once in place, dams and their toxic reservoirs require maintenance forever. Over the past 100 years, more than 300 mine related dams worldwide have failed, mainly due to foundation weakening, seepage, overtopping and earthquake damage.[2]  Due to a strong popular surge against uranium mining in the 2021 election, the Greenlandic Parliament passed the “Uranium Act”, banning prospecting, exploration and exploitation of uranium, giving the Government the ability to restrict or revoke these types of licenses.  GM is suing both Greenland and Denmark for the right to mine.

For years China has attempted to control both quantity and price of Rare Earth elements. Since the mid 90’s China has dominated the market for these elements and made attempts to control prices, limit exports, limit processing outputs (the WTO struck down export quotas in 2014) and most recently consolidating producers under state control.[3]

China’s uneven success controlling the market allows the CCP to use REEs as leverage against the west.  The Party controls markets causing the west to increase production and refining capacity.  As a result, China’s share of global rare earth production has fallen from 80% in 2017 to 63% in 2022 but still has 85% of rare earth processing, and 92% of rare earth magnet production.[4]  Clearly Greenland’s potential supply of REE’s makes it an area of great import to the US and the West in general.

Trump’s comments on January 7^th, 2025, at Mar-a-Lago fueled concerns.  In answer to the question: “Can you assure the world that, as you try to get control of these (Panama and Greenland) areas, you are not going to use military or economic coercion?”  he responded simply “No.”  The President did say he believed we needed both for economic security.  The reason he answered no is most likely due to his experiences in negotiating large deals.  If he were to eliminate possible negotiating positions, for example military force, then the next question would be “what about economic, or legal, or tourism restrictions” and on and on.  It is a slippery slope.  By not giving clues as to his negotiation strategy, he keeps all options and alternatives on the table.  Combined with his natural unpredictability, this is a strong initial position.  As for Greenland, Prime Minister Múte Egede said previously Greenland is not for sale but is open to business dealings with the U.S. “We don’t want to be Danes.  We don’t even want to be Americans. We want to be Greenlanders.”[5]

Trumps comments about using tariffs to force Denmark to sell the island set off a storm of controversy in Europe.  In early January Trump said he would “tariff Denmark at a very high level” if they refused offers for the island.  Such a move would immediately involve the European Union which has mechanisms to respond.  The EU’s Anti-Coercion Instrument (ACI), which the Commission touts “provides the EU with the means to deter and respond to economic coercion, and thereby better defend its interests and those of its Member States on the global stage.”  While foreign powers may act against members of the EU, the union itself ultimately has the power to respond on Denmark’s behalf, making any tariffs, especially those deemed coercive, effectively a declaration against the EU not Denmark.  Taking on the EU is a different matter than threatening tariffs against Denmark.

That said, a negotiation that includes things Greenlanders want (e.g., autonomy and recognition) while allowing for increased military presence and the rights to mine REEs may be Trumps goal.  Since 1943, Pituffik SB has been the only US base.  It is in the far northwest corner at the “Top of the World”.  This view enables Space Superiority. Pituffik supports Missile Warning, Missile Defense and Space Surveillance missions from a solid-state phased-array radar and Satellite Command and Control, as well as thousands of flights using its 10,000-foot runway and considerable ramp space 365 days a year.[6]  If the administration expands Pituffik Space Base on the northwest of the island it will bring additional economic benefit to the local community.  If the US can satisfy Greenlander desires to properly dispose of uranium gathered while capturing REEs, it is possible other incentives can strengthen our presence on the island, enhancing national security.  Since the President did not mention Greenland in the inauguration speech, it may indicate a slower approach to this NATO ally and discuss the way forward with both Denmark and Greenland.  A spokesperson for the EU said: “We believe that transatlantic cooperation is critical to enhancing security and promoting growth in a contested geopolitical environment. The EU and the U.S. have the largest bilateral trade and investment relationship in the world, supporting more than 16 million jobs and accounting for 42 percent of global GDP.”[7]

Panama

The Panama Canal is an economic engine for the nation of Panama and a strategic resource for the US.  Of the over $5 billion in revenue each year generated by the canal, the government takes about half of the profits.  Between 2006 and 2016 the government invested about $5 billion to build larger locks to allow larger ships to pass.  This had a ripple effect in the US, requiring investments in US ports to support an increase in their use as ships moved between the east and west coasts.  U.S. investment in Panama stood at almost $13 billion in 2023, with only $515 million from China. China has also invested in the area, through a company named Hutchinson controlled by the family of Li Ka-shing.  According to the Panama Maritime Authority, although Chinese cargo ranks a distant second to the U.S., less than 22% of goods transiting the waterway, Hutchinson has a 39% market share of income generated by all terminals.  Chinese military vessels haven’t crossed the canal in almost a decade while US Navy use of the canal is infrequent.  However, if needed, the canal offers a much more efficient way to move naval forces between the Atlantic and Pacific.  From Norfolk to Hawaii would take a carrier strike group about 2 weeks using the canal, but if it was somehow unavailable the trip would take twice as long, about 27 days (assuming an average of 22 knots cruise speed).

Responding to an emerging crisis in the Pacific may necessitate deployments of Atlantic assets to the Pacific.  In this case, the additional two weeks necessary to move substantial forces (if the Canal was unavailable) might make the difference between the assets arriving in time to influence Chinese political calculations or impact combat operations before it was all over.  Arguments about using canal container ports for military use fail to recognize the considerable time and expense of re-purposing these ports for military use and appending rationale for such alterations.  The military utility of the ports, from the Chinese perspective, would be only to limit the use of the canal by US Naval forces seeking to reinforce the Pacific.  Using the ports for Chinese power projection is not likely a PRC goal.

Still, the Chinese are looking farther into the future than the US…again.  Having the ability to close the canal to the US Navy would potentially offer the Chinese a strategic advantage diplomatically and militarily.  Reviewing the landscape, several facts become clear:  The canal is well run by the Panamanians.  Charges for use of the canal are made using size and weight (displacement) of individual ships and follow global market trends for such costs.  US access and use of the canal is beyond our control in the current system:  We are just another patron paying our way for using the facility.  Finally, assured access and priority use of the canal is potentially a national security issue for the US given China’s continued military growth and constant threats toward Taiwan.

Would President Trump use military force to regain control? His statement that he would not rule out the use of force is, as in the Greenland example, a pre-negotiation tactic and not, as has been described, a direct threat.  Force?  Perhaps as a last resort, but clearly a diplomatic solution is in the interest of all parties.  Panama receives a considerable amount of revenue from the canal, and they would not want to risk those funds if the US were to take complete control of the canal.  A negotiated settlement could allow continued profits for the government.  One reason President Carter signed the agreement was the fact that workers on the canal were given preferential treatment as compared to other Panamanians, causing riots in the mid-1960s and precipitating the negotiations that led to the 1977 treaty.  Any agreement now would need to ensure that any perceived injustices between factions in Panama are not issues moving forward.  Such guarantees would be in both nations’ interests.  A military invasion of Panama would be akin to Saddam Hussein’s invasion of Kuwait and viewed by the international community through the same lens.

Clearly the new president is serious.  His inauguration speech outlined his intent, however unfortunate the choice of his words “take back” may be, even though amplifying the claim China was controlling the canal.  Regaining control, and assuring access are likely the preferred outcomes but it will be up to the new secretary of state to find a way to negotiate an outcome that satisfies the President and avoids violence.

Oh Canada!

In his January 7^th press conference, the then President-elect mentioned our northern neighbor.  This was not the first mention of Canada as a state.  In early December at a dinner with then Prime Minister Justin Trudeau, Trump made the comment in response to Trudeau’s concerns that tariffs on Canada would damage Canada’s economy.  Public Safety Minister Dominic LeBlanc, who attended the Friday dinner at Trump’s Mar-a-Lago club, said Trump’s comments were in jest.  “The president was telling jokes. The president was teasing us. It was of course in no way a serious comment,” LeBlanc told reporters in Ottawa.[8]  But it appears Minister LeBlanc has not correctly read Trump’s intent, as the subject was mentioned several times since.

Although the President has ruled out military action against Canada (another NATO ally and founding member of the alliance), his threat of up to a 25% tariff unless changes are made to the border appear to be not only real but are working through his advisors to find a way to implement the action.  Last year, the US imports totaled $418 billion from Canada according to federal trade data.  Meanwhile, the US exported $354 billion worth of goods to Canada last year.  Imports from Canada take the form of electricity and oil.  About 60% of U.S. crude oil imports are from Canada, and 85% of U.S. electricity imports as well.  Canada is also the largest foreign supplier of steel, aluminum and uranium to the U.S. and has 34 critical minerals and metals necessary for national security.  Canadian officials have reportedly drawn up a plan that will levy immediate tariffs on $37 billion worth of American goods if Trump moves against Canada increasing to $110 billion if the president doesn’t back down.  Ottawa is also prepared to enact some more severe measures, including a possible oil export ban, and dollar-for-dollar tariffs if other efforts don’t succeed.

Conservative Leader Pierre Poilievre said Tuesday he supports unspecified retaliatory tariffs against Trump for his “unjustified 25 per cent tariffs.”  Poilievre urged Trudeau to immediately reconvene Parliament so MPs and senators can pass legislation to strengthen the border (at Trumps request) and “agree on trade retaliation and prepare a plan to rescue Canada’s weak economy.”  Under Canadian trade law, the government can impose retaliatory tariffs on the U.S. without Parliament’s approval.[9]  Although according to Canadian officials, the border situation is less severe than President Trump has claimed, getting them to increase patrols and beef up security with threats of tariffs may be the victory Trump is looking for, sending a message to friends and potential foes alike.

Conclusions

Trump is serious about all these issues:  Greenland as a national security asset, Panama Canal access, and border security.  How he imposes his will against current US allies will potentially set the stage for further moves diplomatically and economically against greater threats like China, Iran and Russia.  Clearly if he is willing to treat friends and neighbors with threats and animosity, other nations with more tense relationships with the US should be wary, and careful.

[1] See:  https://eng.geus.dk/media/13174/go29.pdf

[2] See:  https://www.ejiltalk.org/transition-minerals-a-cautionary-tale-from-greenland/ and also, https://theconversation.com/mine-waste-dams-threaten-the-environment-even-when-they-dont-fail-130770

[3] See:  https://www.fpri.org/article/2022/03/chinas-rare-earth-metals-consolidation-and-market-power/

[4] See:  Lara Seligman.  https://www.politico.com/news/magazine/2022/12/14/rare-earth-mines-00071102

[5] See:  https://thehill.com/homenews/administration/5097789-trump-greenland-international-security/

[6] See:  https://www.petersonschriever.spaceforce.mil/Pituffik-SB-Greenland/

[7] See:  https://www.newsweek.com/trump-tariff-threat-denmark-showdown-european-union-2013248

[8] See:  https://apnews.com/article/canada-trump-tariffs-trudeau-trade-opposition-border-5d3dbbb4a701bb1676ee588bfbf2396a

[9] See:  https://www.cbc.ca/news/politics/trudeau-very-strong-response-1.7437032 

 

About Michael Snodgrass

Michael Snodgrass retired from the U.S. Air Force as a Major General in 2011. He is currently the President of SG Strategic Solutions LLC.

He has extensive command and leadership experience in the U.S. Air Force and joint world, as well as a wide range of disciplines, including defense and aerospace, technology development, government acquisitions and requirements, foreign military sales and leadership coaching.

He consults with the government, defense industry and other businesses on a wide range of topics. In 2019 he became an adjunct contract professor supporting the U.S. Air Force on strategy and policy development.

From 2014 to 2016 he was Vice President, International Business Development at Raytheon Corp. Prior to that he was Director of U.S. Air Force and Federal Aviation Administration programs at Engility Corp.

General Snodgrass joined Burdeshaw and Associates in 2012 and is a Senior Consultant for numerous clients in the defense and aerospace sectors.

Prior to his retirement, he was U.S. Air Force Assistant Deputy Under Secretary for International Affairs; responsible for formulating and executing USAF Policy, Strategy and Programs for Building Partnerships and integrating Air Force policy with international partner goals, totaling over $40 billion total program value.

From 2007 to 2010 he served as the first Chief of Staff, U.S. Africa Command. There, he was responsible for the construction of the country’s newest Unified Geographic Command.

He has commanded at the squadron, group and wing levels and has lived in/visited over 50 nations while in uniform. He has over 3500 flight hours in various aircraft including the F-16, F-15, F-4, C-130 and HH-60, as well as over 100 combat missions in Operation Desert Storm.

In addition, General Snodgrass teaches leadership and management courses. In his spare time, he provides leadership coaching and training to the U.S. Air Force ROTC unit at Florida State University.