Trump Pushes Greenland Annexation as Economic Challenges Mount on Arctic Island

preCharge News POLITICS — Donald Trump is interested in annexing Greenland, an Arctic island offering a wealth of untapped mineral resources.

But as the U.S. president dialed up the rhetoric about America annexing the self-governing Danish territory, sparking a backlash from international leaders, a report detailed the challenges facing its economy.

Danish Central Bank Warns of Major Economic Challenges in Greenland

Published Tuesday, a report by Søren Bjerregaard, head of securities and balance of payments at Danmarks Nationalbank, warned that there were “major challenges ahead” for Greenland’s economy.

The Arctic island’s economy — largely driven by the fishing industry — expanded by 0.8% in 2025 and is expected to grow a further 0.8% this year, down from 2% in 2022. According to the Danish central bank, the slowdown is likely to continue.

“The Greenlandic economy is slowing down, with modest growth and serious challenges for public finances,” Bjerregaard wrote.

“This is partly because the expansion of infrastructure in the form of airports is nearing completion, and planned major projects in energy supply and other areas have not yet begun.”

Declining Shrimp Stocks and Fiscal Strain Pressure Public Finances

He added that at the same time, vital shrimp stocks were declining, while public finances “deteriorated surprisingly sharply in 2025.” Part of the pressure on public finances was arising from a decrease in dividends from government-owned firms.

“Liquidity in the Greenland Treasury fell to a critically low level in the second half of the year,” Bjerregaard said, noting that legislation set to be rolled out this year contains urgent fiscal tightening measures.

“More fiscal challenges lie ahead, with a declining and ageing population putting further pressure on the economy,” he added.

Greenland’s Population Expected to Shrink Sharply by 2050

Greenland’s population, which stood at 56,699 in the final quarter of 2025, is expected to shrink 20% by 2050, as the territory struggles to attract migrants to replace emigrating residents.

Trump Says He Is ‘Very Serious’ About Acquiring Greenland

In an interview with NBC News on Monday, Trump said he was “very serious” about acquiring the Arctic island. A day earlier, he told reporters that the U.S. needs Greenland to bolster its national security.

He was speaking after Washington launched a military operation in Venezuela that led to the capture of the country’s president, Nicolas Maduro.

Trump Links Greenland to Broader U.S. Strategic Interests

Trump later told The Atlantic that America “absolutely” needs Greenland, with the president telling the magazine that countries aside from Venezuela could be subject to U.S. intervention.

Trump has long floated the idea of taking Greenland. In early 2025, he said the U.S. would assume control “one way or the other.”

Greenland and Denmark Reject U.S. Annexation Claims

Officials in Greenland, Denmark and across the European continent have rejected the notion that the U.S. can make any claim on Greenland.

On Monday, Greenland’s prime minister, Jens-Frederik Nielsen, rebuked parallels between the territory and Venezuela.

“The situation is not such that the United States can simply conquer Greenland,” Nielsen told a news conference. “Our country is not really the right one to compare with Venezuela. We are a country that is democratic and has been democratic for many, many years.”