The United States is reportedly willing to exchange a 99-year lease for de facto control of Greenland. The Davos negotiations are imminent, sparking disputes over Arctic sovereignty and resources.
(Background: Trump announced that in February, tariffs would be increased by 10% on Denmark and eight other European countries, vowing to “take Greenland,” prompting the EU to team up for countermeasures)
(Additional context: Why is Trump so determined to take Greenland? What secrets does this 80% ice-covered island hold?)

Table of Contents

• Leasing Instead of Annexation
• Prosperity Plan Wins Hearts
• Denmark, NATO, and New Divisions

President Trump has threatened to impose tariffs starting February on Denmark, Norway, and six other NATO members, vowing to gain de facto control of Greenland. As US-Europe relations plummet, market attention is focused on whether the ongoing World Economic Forum in Davos, Switzerland, can lead to an agreement to reduce current political risks.

Against this backdrop, reports indicate that U.S. negotiators have arrived in Switzerland with a draft of a 99-year lease. The U.S. hopes to replace the previously discussed annexation plan through long-term leasing, maintaining Denmark’s nominal sovereignty while gaining control over Greenland’s governance and economic benefits.

Leasing Instead of Annexation

According to Kyiv Post, U.S. officials seem to have abandoned the term “annexation” in favor of emphasizing “de facto control.” The concept is similar to common cash flow financing on Wall Street: not directly purchasing ownership of an asset, but locking in usage rights and revenue sharing through a contract.

Historically, the UK acquired the New Territories of Hong Kong in 1898 through a 99-year lease. Now, the U.S. may be attempting to replicate this model in the Arctic.

Prosperity Plan Wins Hearts

Another core element of the draft is the so-called “Prosperity Plan.” The U.S. plans to offer approximately 56,000 residents of Greenland U.S. citizenship, bilateral travel rights, and promises that as long as they do not relocate to the mainland, they will be exempt from federal income taxes.

Official polls in Greenland show that about 85% of residents currently oppose U.S. takeover, but Washington bets that economic incentives could gradually change attitudes, replicating the Puerto Rican model of defense burden-sharing in exchange for economic openness.

What is the Puerto Rican Model?

This model originated in 1952 when Puerto Rico established its “Free Associated State” status. In terms of security and defense, Puerto Rico chose not to pursue independent statehood, ceding defense and foreign policy authority entirely to the U.S. federal government; although residents have U.S. citizenship and are subject to military service, they do not have voting rights for the U.S. president while residing on the island.

In exchange for relinquishing military and diplomatic sovereignty, Puerto Rico gained the privilege of deep integration into the U.S. market. Through zero-tariff trade with the mainland, the use of the U.S. dollar as legal tender, and various federal tax incentives, Puerto Rico successfully tied its economy closely to the world’s largest economy. This model allows the island to attract foreign investment under low-risk, highly open conditions—“security paid for by a great power, prosperity shared through the market”—forming a unique political and economic structure.

Denmark, NATO, and New Divisions

The Danish government and Greenland’s autonomous government currently emphasize that sovereignty is indivisible. However, this issue has now gone beyond bilateral relations and has become a potential rift within NATO. Trump’s imperial-style pressure on allies highlights the contradictions in great power competition.

Whether the Davos negotiations can finalize details, the U.S. has redefined sovereignty concepts in the post-Cold War era. The Arctic is no longer a distant ice plain but a frontline of military, technological, and capital competition.