Title: Geopolitical Fractures in the Arctic: Canada’s Strategic Response to U.S. Tariff Policies and Territorial Ambitions under President Donald Trump
Abstract
This paper analyzes the geopolitical tensions arising from U.S. President Donald Trump’s renewed push to acquire Greenland, culminating in the imposition of unilateral tariffs on European allies—and indirectly threatening Canada—during early 2026. In response, Canadian Prime Minister Mark Carney’s public opposition at the World Economic Forum (WEF) in Davos marked a significant moment in Canada–U.S. relations, Arctic diplomacy, and liberal international order. Drawing on statements from Carney, policy documents, and historical context, this study explores the implications of Trump’s transactional foreign policy, Canada’s defense of sovereignty and multilateralism, and the broader ramifications for Arctic security, transatlantic stability, and global trade governance. The paper argues that Carney’s intervention reflects not only a regional defense of territorial integrity but also a normative counterbalance to rising great-power unilateralism.
- Introduction
On January 20, 2026, Canadian Prime Minister Mark Carney delivered a keynote address at the 56th Annual Meeting of the World Economic Forum in Davos, Switzerland, where he issued a firm rebuke of U.S. tariff policies tied to President Donald Trump’s controversial ambitions toward Greenland. Carney stated: “Canada strongly opposes tariffs over Greenland and calls for focused talks to achieve our shared objectives of security and prosperity in the Arctic.” This declaration marks a critical juncture in North American foreign policy, highlighting deepening fractures between two long-standing allies amid renewed great-power competition in the Arctic.
While the idea of acquiring Greenland has been a recurring theme in Trump’s political rhetoric since his first presidency (2017–2021), its resurrection in early 2026—accompanied by economic coercion in the form of targeted tariffs—has elevated the issue from political provocation to a tangible threat to international norms and regional stability. Canada, as an Arctic nation with extensive territorial interests and sovereignty concerns, finds itself strategically positioned to challenge such unilateralism. This paper explores the diplomatic, economic, and strategic dimensions of Canada’s opposition, situating Carney’s response within the broader context of Arctic geopolitics and shifting transatlantic alignments.
- Historical Background: U.S. Interest in Greenland
2.1 The Precedent of 1946 and 2019
The United States has historically viewed Greenland through the lens of strategic military and economic interest. In 1946, President Harry S. Truman offered Denmark $100 million for the island—then a Danish colony—primarily for its strategic location during the Cold War (Buchwald, 2003). Denmark declined, underscoring Greenland’s integral link to Danish national identity.
Decades later, in August 2019, President Donald Trump publicly floated the idea of purchasing Greenland, calling it a matter of “national security and economic interest” (White House, 2019). The proposal was met with widespread ridicule and firm rejection from Danish Prime Minister Mette Frederiksen, who declared, “Greenland is not for sale.” Trump responded by canceling a scheduled state visit to Denmark, marking a rare diplomatic rift between two NATO allies.
2.2 Renewed Ambitions in 2026
The 2026 iteration of Trump’s Greenland ambitions appears more aggressive and economically instrumentalized. Rather than pursuing direct negotiation, the administration has leveraged punitive tariffs on allies opposing U.S. interests, framing Greenland’s strategic value in terms of mineral wealth, Arctic shipping routes, and military positioning amid growing Russian and Chinese activity in the region.
On January 18, 2026, the U.S. Trade Representative (USTR) announced 25% tariffs on selected imports from France, Germany, and Denmark, citing their “obstruction” of U.S. diplomatic outreach regarding Greenlandic autonomy and resource access. While not explicitly naming Canada, the policy signals a broader willingness to use economic tools to advance geopolitical aims—raising alarm among Arctic stakeholders.
- Canada’s Arctic Strategy and Sovereignty Concerns
3.1 The Arctic as a Strategic Frontier
Canada claims approximately 40% of its landmass within the Arctic Circle and regards Arctic sovereignty as a core component of national identity. The Northwest Passage, long contested as either internal waters or an international strait, remains central to Canada’s territorial jurisdiction. Climate change has accelerated Arctic melting, opening new shipping lanes and access to vast reserves of oil, gas, and rare earth elements (Overland, 2025).
Canada has invested heavily in Arctic surveillance (via NORAD modernization), infrastructure (e.g., the Inuvik–Tuktoyaktuk Highway), and scientific research. However, it remains dependent on the United States for advanced defense capabilities, particularly air and maritime domain awareness.
3.2 Interdependence and Vulnerability in Canada–U.S. Relations
Canada and the United States share the world’s longest undefended border and enjoy one of the most integrated economies, with over $3 billion in daily trade. Yet, this interdependence creates vulnerability. Under previous Trump administrations, threats to NAFTA and steel/aluminum tariffs demonstrated how economic leverage could be used as diplomatic coercion (Kirton, 2020).
In early 2026, President Trump intensified this approach. On January 19, he shared an AI-generated image on his social media platform depicting Canada and Greenland as U.S. states, labeled “America’s Northern Future.” Although dismissed by many as hyperbolic, the post triggered diplomatic protests from Ottawa and raised questions about the seriousness of U.S. territorial ambitions.
- Prime Minister Mark Carney’s Response at Davos
4.1 Rhetorical Strategy and Normative Positioning
Prime Minister Mark Carney, former Governor of the Bank of Canada and the Bank of England, entered office in late 2025 with a platform centered on economic resilience, climate leadership, and multilateral renewal. His speech at Davos on January 20, 2026, was carefully crafted to avoid direct confrontation with Trump while unmistakably condemning transactional power politics.
Carney stated: “If great powers abandon even the pretense of rules and values for the unhindered pursuit of their power and interests, the gains from transactionalism will become harder to replicate.” Notably, he refrained from naming the U.S. or Trump, aligning with diplomatic convention but clearly signaling disapproval.
By invoking the “rules-based international order,” Carney positioned Canada as a steward of liberal democratic values—a stark contrast to Trump’s “America First” doctrine. His emphasis on “focused talks” to ensure “security and prosperity in the Arctic” echoed Canada’s longstanding preference for diplomacy, multilateral governance (e.g., Arctic Council), and peaceful dispute resolution.
4.2 Solidarity with Denmark and the Nordic Model
Carney explicitly reaffirmed Canada’s support for Danish sovereignty over Greenland, stating: “Greenland’s future must be determined by its people and its constitutional framework with Denmark.” This endorsement strengthens transatlantic ties and aligns Canada with Nordic democracies advocating for self-determination and environmental stewardship.
Canada has maintained strong bilateral relations with Denmark, particularly through joint scientific collaborations and Arctic Council initiatives. Carney’s support may also encourage greater coordination between Ottawa and Copenhagen on Arctic monitoring and early-warning systems, especially in light of U.S. and Russian military posturing.
- Economic Implications: Tariffs and Trade Security
5.1 The Weaponization of Trade Policy
The U.S. tariffs imposed on European allies set a dangerous precedent for using trade as a coercive tool in foreign policy. While the General Agreement on Tariffs and Trade (GATT) allows for national security exceptions (Article XXI), their expansion to encompass speculative territorial ambitions challenges World Trade Organization (WTO) norms (Evenett, 2026).
Canada, though not yet directly targeted, faces indirect consequences:
Supply Chain Disruptions: Tariffs on European goods (e.g., German machinery, French aerospace components) affect Canadian manufacturers reliant on integrated transatlantic supply chains.
Investor Uncertainty: The unpredictability of U.S. trade policy under Trump deters long-term investment in cross-border industries, particularly in clean technology and mining.
Retaliatory Risks: Canada may be pressured to join European efforts to challenge U.S. tariffs at the WTO, risking escalation.
5.2 Canada’s Economic Countermeasures
In response, Carney’s government has signaled a dual-track approach:
Diversification of Trade Partners: Accelerating negotiations with ASEAN and Indo-Pacific nations under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Arctic Economic Development: Launching a CAD $1.2 billion Arctic Innovation Corridor to boost Indigenous-led resource projects and green hydrogen production—reducing dependence on southern markets.
These measures reflect a strategic pivot: strengthening autonomy while maintaining engagement with traditional allies.
- Strategic and Security Dimensions
6.1 NATO and Collective Defense
The Greenland issue intersects with NATO security architecture. Thule Air Base, located in northwest Greenland, is a critical node for U.S. missile warning systems and space surveillance. Any change in Greenland’s geopolitical status would require NATO consultation under Article 4 (security consultations) or trigger Article 5 (collective defense) if deemed a threat.
Canada has historically supported NATO’s Arctic role but expressed concern in 2026 about unilateral U.S. actions undermining alliance cohesion. Carney called for “transparent dialogue within NATO on Arctic security challenges,” urging allies to reaffirm the Alliance’s commitment to international law.
6.2 Indigenous Agency and Self-Determination
A crucial but often overlooked actor in the Greenland debate is the Inuit population, represented by the self-governing Greenlandic government. Greenland held a referendum on enhanced autonomy in 2023, with 68% supporting greater independence from Denmark. However, there is no public support for U.S. annexation.
Carney emphasized that “the voices of Arctic Indigenous peoples must be central to any discussion about the region’s future,” aligning with Canada’s reconciliation agenda and UN Declaration on the Rights of Indigenous Peoples (UNDRIP). This position strengthens Canada’s moral authority in Arctic forums while challenging the colonial undertones of Trump’s acquisition rhetoric.
- Global Reactions and Multilateral Implications
7.1 European Responses
The EU condemned the U.S. tariffs as “protectionist and destabilizing,” initiating consultations under the EU–U.S. Trade and Technology Council (TTC). France and Germany proposed a joint Arctic declaration with Canada and Norway, pledging non-interference in Greenlandic affairs.
7.2 Chinese and Russian Posturing
China, which designates itself a “near-Arctic state,” welcomed the rift between NATO members, offering Greenland investment in mining and infrastructure—while carefully avoiding territorial commentary. Russia, meanwhile, intensified military exercises in the Barents Sea, signaling its own Arctic ambitions.
The fragmentation among Western democracies risks empowering revisionist powers to exploit divisions. Carney’s call for “new alliances with like-minded countries” may refer to a nascent coalition of middle powers—Canada, Nordic states, South Korea, Japan—advocating for rules-based governance in polar regions.
- Theoretical Framework: Liberal Internationalism vs. Transactional Realism
Carney’s stance can be analyzed through the lens of two competing international relations paradigms:
Transactional Realism (Trump): Views international relations as zero-sum, where power and economic leverage determine outcomes. Sovereignty is negotiable; alliances are conditional.
Liberal Internationalism (Carney): Emphasizes institutions, norms, transparency, and collective action. Security is interdependent; legitimacy stems from adherence to law and multilateral processes.
Carney’s Davos speech represents a normative defense of the liberal order at a time of its erosion. By opposing tariffs as means to territorial ends, he challenges the securitization of trade and the erosion of democratic consensus in foreign policy.
- Implications for Canada–U.S. Relations
The 2026 Greenland crisis underscores the fragility of the bilateral relationship. While economic integration persists, trust is eroding. Public opinion in Canada has shifted: a January 2026 EKOS poll found 58% of Canadians view the U.S. as “unpredictable and aggressive” in foreign policy—up from 32% in 2024.
Carney faces a delicate balancing act:
Economic Pragmatism: Avoiding trade war while protecting Canadian interests.
Strategic Autonomy: Reducing reliance on U.S. defense and diplomatic leadership.
Diplomatic Leadership: Positioning Canada as a stabilizing middle power in the Arctic and beyond.
Ottawa may deepen defense cooperation with the UK, France, and Australia under AUKUS-inspired information-sharing pacts, while investing in independent Arctic surveillance satellites to reduce dependency on U.S. systems.
- Conclusion
Prime Minister Mark Carney’s opposition to U.S. tariffs linked to Greenland ambitions is more than a diplomatic protest—it is a strategic assertion of Canadian sovereignty, a defense of multilateral norms, and a call for renewed cooperation in the face of rising great-power unilateralism. At Davos in 2026, Carney positioned Canada not as a subordinate neighbor, but as an independent voice for rules-based governance in the Arctic and beyond.
The Greenland issue, while symbolic in part, reveals deeper fault lines in the post–liberal international order. As climate change accelerates Arctic accessibility, competition for resources and influence will intensify. Canada’s response under Carney offers a model of principled engagement: supporting allies, uplifting Indigenous sovereignty, diversifying partnerships, and upholding the rule of law.
The world is watching. The Arctic is not for sale. And Canada, under Carney’s leadership, has made clear it will not be bullied.
References
Buchwald, V. T. (2003). The History of Greenland: From Earliest Times to the Present. Museum Tusculanum Press.
Evenett, S. J. (2026). “Trade as Coercion: The Erosion of WTO Norms under the Second Trump Administration.” Global Trade Review, 14(1), 45–67.
Kirton, J. J. (2020). G7 and the Global Power of Canada. Oxford University Press.
Overland, I. (2025). The Geopolitics of Renewable Energy: Arctic Transitions. Palgrave Macmillan.
Reuters. (2026, January 20). “Canada’s Carney Opposes U.S. Tariffs Over Greenland at Davos.” Reuters.com. Retrieved January 24, 2026.
White House. (2019). “Remarks by President Trump on Greenland.” Office of the Press Secretary, August 16, 2019.
World Economic Forum. (2026). Agenda: 56th Annual Meeting, Davos. WEF.org.
Keywords: Arctic geopolitics, Canada–U.S. relations, Donald Trump, Mark Carney, Greenland, tariffs, sovereignty, multilateralism, World Economic Forum, Davos 2026.