President-elect Donald J. Trump has threatened to impose tariffs on many countries for a variety of reasons.
On Monday, he found a new purpose for his favorite economic tool. Trump said he would impose “very high tariffs” on Denmark if the North American island of Greenland, an autonomous territory within the Kingdom of Denmark, refuses to become part of the United States.
“They should give up Greenland because it's necessary for national security,” Trump said of Greenland.
Denmark has a smaller population than New York City, so it is not a large trading partner for the United States. The U.S. ally and NATO member sent more than $11 billion in goods to the United States in 2023, just a fraction of more than $3 trillion in imports. Meanwhile, the United States has sent Denmark more than $5 billion in industrial machinery, computers, aircraft, scientific equipment and other goods.
But despite its small size, Denmark, which is in charge of Greenland's foreign and security affairs, is home to some much-loved products in the U.S., which Trump has implemented heavy tariffs on. There is a possibility that prices will rise. Roughly half of Denmark's recent exports to the United States have been packaged medicines, insulin, vaccines and antibiotics, according to the Economic Complexity Observatory, a trade data platform.
The main reason for this is that the country is home to Novo Nordisk, the maker of the popular weight loss drugs Ozempic and Wigovy. The company is so important to Denmark's economy, recently accounting for half of Denmark's private sector employment growth and the country's overall economic growth, that some have dubbed Denmark a “pharmaceutical nation.”
Novo Nordisk is expanding production in the United States to meet surging demand for its GLP-1 weight loss products. The company does not disclose how much product it exports, but it produces medicines in Denmark and the United States for the U.S. market.
A Novo Nordisk spokesperson said in a statement that the company is monitoring the situation closely but does not comment on theories or speculation.
Gilberto Garcia, chief economist at DataWheel and member of the Economic Complexity Observation Team, said Denmark's exports of immunization products, including medicines such as Ozempic, were “growing exponentially”.
He said Denmark is also a major supplier of hearing aids to the United States.
In addition to medicines, Denmark also sends products to the United States such as medical equipment, fish fillets, pork, coal tar oil, petroleum, and baked goods, according to the OEC.
And it's worth noting that for many children (and adults), Denmark is the home of the world's largest toy manufacturer, the Lego Group.
It's unclear how much Lego exports directly from Denmark to the U.S., but the company serves a large portion of the U.S. market from a factory in Mexico and a new carbon-neutral facility in Virginia. In addition to Denmark, we also manufacture toy blocks at factories in Hungary, the Czech Republic, China, and Vietnam. Lego did not respond to a request for comment.
But Lego, like other multinational companies with global supply chains that rotate raw materials and products around the world, could be disrupted by tariffs. Mr. Trump has threatened to tax goods imported into the United States not only from Denmark but also from Mexico, China, and other countries around the world.
Trump's threat to seize Greenland came at a rambling press conference in which the president-elect also suggested retaking the Panama Canal and turning Canada into an American state, all of which was echoed by foreign leaders. made him furious.
Trump argued on Tuesday that U.S. ownership of Greenland is a national security issue, given the routes charted by Russian and Chinese ships.
“Greenland belongs to the Greenlanders,” Greenland Prime Minister Mute Egede wrote on Facebook on Tuesday. “The fight for our future and independence is our business.”
A European Commission spokesperson said Wednesday that Trump's comments about occupying Greenland were “hypothetical.” Asked about the threat of tariffs, the spokesperson said the European Commission had been preparing for any impact that Trump's inauguration would have on European trade.
Jacob Funk Kierkegaard, a Brussels senior fellow at the Peterson Institute for International Economics, said few European politicians would take Mr. Trump's remarks literally.
“This is an outrageous demand,” Kierkegaard said of Trump's threat to take Greenland. “The only logical thing to do is that by making this outrageous demand, President Trump would get some concessions that he wouldn't have gotten otherwise.”
Kierkegaard said he could expect an EU-wide response if Trump follows through on his threat to impose tariffs on Denmark. “This idea that, as a single member of the EU, we could threaten Denmark with tariffs and pressure it into policy concessions would invite retaliation from across the EU.”
During his first term, Trump imposed tariffs on numerous countries and hundreds of billions of dollars of goods. But other tariff threats never materialized, and it's unclear how much he will follow through on new threats.
On Tuesday, the president-elect also reiterated his threat to impose “very serious tariffs” on Mexico and Canada, complained about the U.S. trade deficit with Canada and the European Union, and renamed the Gulf of Mexico the “Gulf of Mexico.” I came up with a plan. America. “
