By Chana Wakslak, Senior Business Editor and Business Manager
So far, in his time as President of the United States, Donald Trump has made many bold claims about expanding U.S. territories, including purchasing Greenland from Denmark and, at one point, hypothetically acquiring control of the Panama Canal. While these suggestions sparked widespread debate and even international criticism, they also raised important financial and geopolitical questions. Could such acquisitions actually happen? And should they?
Does the U.S. Have the Money?
The United States’ ability to finance such a purchase would depend on several factors. As of recent financial data, the U.S. national debt exceeds $33 trillion, and annual budget deficits remain in the trillions.
Nevertheless, the federal government has in the past demonstrated its ability to finance extraordinary purchases. The Louisiana Purchase in 1803 cost $15 million (approximately $342 million today), while Alaska was purchased from Russia for $7.2 million in 1867 (equivalent to $144 million in today’s dollars). However, Greenland is estimated to be worth upwards of $1.3 trillion, factoring in its natural resources, strategic location and territorial size. Financing such a purchase could involve issuing bonds, reallocating defense spending, or increasing taxes – all of which would require Congressional approval and would likely be politically contentious.
The Panama Canal presents a different case. While the U.S. originally built the canal in the early 20th century, it transferred control to Panama in 1999 diplomatically. Acquiring it again would likely involve compensating Panama for its economic and strategic value. Annual revenues from the canal currently exceed $3 billion, which might justify its purchase price, but this would depend on valuation negotiations.
Why Would the U.S. Purchase Them?
The motivation for these acquisitions lays in their potential economic and political advantages. Greenland is rich in untapped natural resources. Securing these resources could bolster U.S. energy independence and technological innovation. Additionally, the island’s location in the Arctic could strengthen U.S. military presence and provide leverage in the race for control over shipping routes there.
The canal is vital for global trade, connecting the Atlantic and Pacific Oceans. U.S. ownership would ensure priority access for American commerce and could provide significant revenue streams. Control over the canal would also enhance U.S. influence in Latin America and could counter growing Chinese investments in the region.
Would It Be a Good Financial Decision?
From a purely financial perspective, the return on investment would depend on the asset’s ability to generate revenue or provide long-term cost savings. While Greenland’s resource potential is huge, the associated costs would be substantial. Additionally, Greenland’s harsh climate and remote location would pose other logistical challenges. The long-term benefits might offset these expenses, but the timeline for profitability could be decades. On the other hand, the canal already generates billions in revenue annually. If the U.S. were to acquire it, the initial cost could potentially be offset within a few decades, making it a more immediate and tangible financial asset than Greenland.
Can the U.S. Even Do This?
Under international law, territorial acquisitions require the consent of the selling party. Denmark has repeatedly stated that Greenland is not for sale, and any such transaction would require the approval of both the Danish government and the people of Greenland, who enjoy significant autonomy.
As for the Panama Canal, acquiring control would likely involve complex negotiations with the Panamanian government and perhaps even amendments to existing treaties. The Torrijos-Carter Treaties explicitly ended U.S. jurisdiction over the canal, and any attempt to reverse this would face significant legal and diplomatic hurdles.
In both cases, financial incentives alone are unlikely to suffice. Sovereignty and national pride are critical factors. Greenland’s population is strongly opposed to becoming part of another country, emphasizing its unique cultural identity. Similarly, Panama’s control of the canal is a point of national pride and economic independence.
That said, a sufficiently generous offer might sway decision-makers, especially if tied to broader economic or strategic benefits. For example, the U.S. could offer Denmark a long-term partnership agreement to jointly develop Greenland’s resources or provide Panama with infrastructure investments in exchange for canal ownership.
Conclusion
While the idea of purchasing Greenland or reacquiring the Panama Canal may seem like a bold extension of America’s historical expansionist policies, the obstacles make this extremely difficult to realize. As history has shown, territorial acquisitions can return real benefits, but they also come with high costs and potential consequences. Whether Donald Trump’s ideas were a serious policy proposal or political theater, they offer a fascinating lens through which to consider the limits of modern purchasing power – and the ever-evolving interplay of money, sovereignty and strategy.
Photo Caption: Aasiaat, Greenland
Photo Credit: Unsplash