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US President-elect Donald Trump's desire to acquire Greenland, an autonomous territory of Denmark, comes with a hefty price tag - between $12.5 billion and $77 billion. This estimate, provided by David Barker, a real estate developer and former economist at the New York Fed, is based on the prices of the US Virgin Islands and Alaska, adjusted for inflation and economic growth, as per The New York Times.
Trump's interest in Greenland is not new, dating back to 2019 when he first suggested the US should purchase the territory. Greenland's strategic location has been valuable to the US since the Cold War era, with President Harry Truman previously offering to buy the Danish territory for $100 million in gold in 1946 - a proposal the Danes declined.
While the idea of one sovereign nation buying territory from another may seem unusual, there are precedents. The US has purchased several territories in the past, including the Louisiana Purchase, Alaska, and the US Virgin Islands.
David Barker pointed out that Greenland's value would increase if its role in US defence is considered, as it would correlate with the size of the US economy. But if the value is based only on minerals, the economy size wouldn't matter as much.
Earlier, a Financial Times report suggested Greenland's resources could be worth $1.1 trillion. But Mr Barker called this estimate unrealistic, saying that the US would not benefit fully from resource extraction, as companies would buy drilling and mining rights, factoring in their own costs and profits.
Acquiring Greenland might not be as simple as making a purchase. Trump's national defence concerns are driving his interest in Greenland, but the island's residents might not be eager to become part of the US. Greenland's Prime Minister, Mute Bourup Egede, has said that the island is "not for sale and will never be for sale".
Putting a price tag on a country, like Greenland, is complex. GDP, which measures a country's economic output, is often used, but it doesn't capture long-term potential or unmeasured resources. Greenland's GDP is around $3.236 billion, but its true value includes future growth and untapped resources like minerals and oil.
Other factors, such as quality of life, infrastructure, and strategic location, also add value. Greenland has valuable unexploited resources not reflected in its GDP.
The US has long maintained a military presence in Greenland, which is a NATO ally, said Nikola Swann, global head of governments and multilaterals at SwissThink. Access to Greenland's minerals like copper and lithium, critical for technology such as batteries and electric vehicles, might be a key factor for the US, Ms Swann added.
Trump has also mentioned the possibility of using military force or tariffs in negotiations, and Denmark's growing economy, driven by pharmaceutical exports to the US, adds further leverage.
While buying national assets like the Panama Canal is easier, buying land or territory today is rare. National pride, democracy, and international norms make such transactions unlikely. Greenland may have a price, but a deal would be hard to achieve in today's world. Everyone agrees that purchasing Greenland "would be the deal of the century," according to Mr Barker.