How Trump's Greenland gameplan hinges on climate change
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Now that President Donald Trump has, er, solved the Panama Canal crisis he created with BlackRock BLK 0.00%↑ buying out the Chinese ports on either side of it (See insight below), his attention is likely to turn to Greenland next week as parliamentary elections are held. Ironically, climate change is a key part of his game plan.
Trump said during his address to Congress this week that he expects the U.S. to get Greenland “one way or another,” which yields a fascinating array of possibilities, from using tariffs on Denmark as pressure to outright invasion. Five of these are discussed in a great piece today by my old USA Today colleague Kim Hjelmgaard. Others can be found with Callaway Climate Insights media partner, Arctic Today.
For our money, Trump will likely use the strategy he used in Panama, and time after time again during his business career: letting someone else pay for it. In this case, a combination of Wall Street and Silicon Valley. Tech billionaires such as Bill Gates and Jeff Bezos have long cited Greenland’s rich mineral deposits as attractive for energy and tech applications, even backing a mining project there together a few years ago. Imagine a consortium of tech giants with a hundred-billion-dollar package to invest in Greenland mining, manufacturing and job creation.
Such a deal would send a massive infusion of wealth to Greenland and could change the constant discussion there of independence from Denmark, which will become more even active next week after the vote on March 11. Despite insistence from Greenland Prime Minister Múte Bourup Egede that the country is not for sale, an investment deal would always be on the table.
A deal like this would only work, however, if Greenland continues its pattern of warming faster than the rest of the world, even Antarctica. Melting ice creates not only mining opportunities but opens shipping channels and trading opportunities with nearby Europe. It creates an investment thesis, but also the international security scenario that Trump continues to harp on. That climate change, which Trump dismisses, is a key driver of both these scenarios is not lost on those who watch what Trump does rather than what he says.
It is unlikely that Trump would ever invade Greenland (or Canada for that matter) or agree to subsidize it like Denmark does. But an investment package, paid for by someone else, would allow him to claim victory in his strategy, just as he has in Panama. Which may be all that matters to him.
How the parliamentary vote goes next week will kick this independence talk into high gear in Nuuk, Greenland’s capital. How investors respond will depend on Trump’s next move, but much more so on the incredible environmental changes happening in a region that is no longer overlooked by the rest of the world.
Don’t forget to contact me directly if you have suggestions or ideas at dcallaway@callawayclimateinsights.com.
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The other winner in BlackRock’s $23 billion Panama ports deal
. . . . BlackRock’s BLK 0.00%↑ Larry Fink handed President Donald Trump an early geopolitical victory this week when it unexpectedly swooped in and purchased the two main ports for the Panama Canal from China’s CK Hutchinson for $19 billion. The deal was one of the biggest of the year so far and allowed Trump to claim he had pushed the Chinese out of one of the world’s biggest trade routes.
But another winner in the deal was CK Hutchinson and its founder, Li Ka-shing, who were able to cash out of a deal after almost 30 years that had not only become fraught with political risks, but climate risks as well.
Climate change had hit the Panama Canal hard at this time last year after a major drought shrank the levels of nearby Gatun Lake, which feeds the fresh water for the canal’s locks, to record lows. The crisis caused it to restrict traffic and raise costs, which were part of what attracted Trump’s ire, as U.S. ships are major customers. A strong rainy season in late 2024 helped restore levels and alleviate the crisis for the time being, but the new owners of the ports now must bear the risk.
The relief for CK Hutchinson was reflected in its share price in Hong Kong, which leaped more than 25% for its biggest one day jump in 27 years, which was about the time it bought into the ports.
For the time being, it seems everybody is happy. Especially the Panamanian government. But we’ll come back to this the next time a drought hits the region. . . .
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Words to live by . . . .
“Sooner or later, we will have to recognize that the Earth has rights, too, to live without pollution. What mankind must know is that human beings cannot live without Mother Earth, but the planet can live without humans.” — Evo Morales, Bolivian politician and activist.
https://substack.com/@johnshane1/note/c-99654016