LIVE MARKETS-Trump’s efforts to take over Greenland face large constraints

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TRUMP’S EFFORTS TO TAKE OVER GREENLAND FACE LARGE CONSTRAINTS

U.S. President Donald Trump has ramped up efforts for the United States to acquire Greenland, but analysts say a military takeover of the country is unlikely while a purchase of the country also faces large constraints.

“Our geopolitical strategists do not expect the US to seize Greenland by force or collapse NATO. Nonetheless, they judge that this is not the moment to add tactical risk,” analysts at BCA Research said in a report on Tuesday.

Trump said on Tuesday there was "no going back" on his goal to control Greenland, refusing to rule out taking the Arctic island by force and rounding on allies as European leaders struggled to respond.

“Seizing territory from a close ally would undermine NATO and trigger a breakdown of the alliance. Purchasing Greenland is seen as more feasible than conquest, though still unlikely to be completed before the midterms,” BCA said.

Trump faces multiple constraints to acquiring Greenland, including an electorate where even many Republicans oppose annexation.

Congressional approval would be needed to both leave NATO and to purchase Greenland, which the U.S. Supreme Court would enforce. Denmark’s reluctance “also implies a prohibitive price,” BCA said.

BCA sees a 70% probability of a non-military resolution to the issue, which includes 30% odds of a short-term tariff war with Europe. In this scenario, in which Europe retaliates, global equities will fall, and U.S. Treasuries and the dollar would decline before the U.S. reverses course.

The remaining 40% reflects the probability that tariffs are not implemented, “either through retreat or court intervention.” In this event, global equities and Treasuries will rally, while the dollar stays flat, BCA said.

(Karen Brettell)

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