On May 9, 2025, the United States announced it is considering establishing a Compact of Free Association (COFA) with Greenland, a semi-autonomous territory of Denmark. This move, led by the Trump administration, aims to enhance U.S. strategic and economic influence in the Arctic region, particularly due to Greenland’s valuable mineral deposits crucial for high-tech and military applications .
Under the proposed COFA, Greenland would receive economic and military support from the U.S. in exchange for greater American military and strategic access. This approach is seen as a shift from previous U.S. attempts to purchase Greenland outright, which were met with firm rejections from both Denmark and Greenland .
However, the proposal faces several challenges. Greenland’s political alignment with Denmark, limited infrastructure, and public skepticism toward U.S. governance could hinder the implementation of such an agreement. Additionally, current COFA agreements with other nations have encountered budgetary and geopolitical complications .
The European Union has also weighed in, emphasizing the importance of Greenland’s sovereignty and the right of its people to make decisions free from external interference .
As discussions continue, the U.S. is also exploring economic initiatives in Greenland, including rare earth extraction projects like the Tanbreez Project, to reduce Greenland’s dependence on Denmark and potentially pave the way for future agreements .
Source: Reuters
