President-elect Donald Trump has threatened to impose tariffs on many countries for different reasons. On Monday, he found a new purpose for his favorite economic tool. Trump said he would apply “a very high tariff to Denmark” if the country refused to allow Greenland — an island in North America and an autonomous territory of the Kingdom of Denmark — to become part of the United States.
“They should give in, because we need it for national security,” Trump said of Greenland.
Denmark, which has a smaller population than New York City, is not a major trading partner for the United States. The country — a US ally and NATO member — sent more than US$11 billion in goods to the United States in 2023, just a small fraction of more than US$3 trillion in imports. On the other hand, the United States exported more than US$5 billion in goods to Denmark, including industrial machinery, computers, aircraft and scientific instruments.
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Despite its small size, Denmark, which manages Greenland’s foreign and security affairs, is home to products that are very popular in the US, which could become more expensive if Trump imposes high tariffs. According to the Observatory of Economic Complexity, a trade data platform, about half of Denmark’s recent exports to the US are packaged medicines, insulin, vaccines and antibiotics.
This is largely due to the presence of Novo Nordisk, maker of the popular weight loss drugs Ozempic and Wegovy. The company is so important to the Danish economy — recently responsible for half of private sector job growth and all of the country’s economic growth — that some call Denmark a “pharmastate.”
Novo Nordisk is expanding its production in the US to meet growing demand for its GLP-1 weight loss products. The company does not publicly specify how much of its products it exports, but it manufactures medicines in Denmark and the US for the American market.
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A Novo Nordisk spokesperson stated that they are monitoring the situation closely, but would not comment on hypotheses and speculation.
Gilberto Garcia, chief economist at Datawheel and a member of the Observatory of Economic Complexity team, said Danish exports of immune products, including drugs like Ozempic, are “growing exponentially.”
Denmark is also the leading supplier of hearing aids to the United States, he said.
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In addition to medicines, Denmark exports medical instruments, fish fillets, pork, tar oil, petroleum and bakery products, among others, to the US, according to the OEC.
And notably, for many children (and adults), Denmark is home to the Lego Group, the largest toy manufacturer in the world.
It’s unclear how much Lego exports directly from Denmark to the US; the company serves a large portion of the American market with a manufacturing facility in Mexico, as well as a new carbon-neutral facility in Virginia. It also manufactures the toy bricks in factories in Hungary, the Czech Republic, China and Vietnam, as well as Denmark. Lego did not respond to requests for comment.
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However, like other multinationals with global supply chains that move raw materials and products around the world, Lego could face trade disruptions from the tariffs. Trump has already threatened to impose tariffs on products from Mexico, China and other countries, in addition to Denmark.
Trump’s threats to reclaim Greenland came at a confusing news conference in which the president-elect also suggested retaking the Panama Canal and making Canada a U.S. state, statements that angered foreign leaders.
Trump argued on Tuesday that American ownership of Greenland was a matter of national security, given the presence of Russian and Chinese ships in the region.
“Greenland belongs to the people of Greenland,” Greenlandic Prime Minister Múte Egede wrote on Facebook on Tuesday. “Our future and fight for independence are our business.”
On Wednesday, a European Commission spokesperson called Trump’s comments about Greenland “hypothetical.” When asked about the tariff threats, the spokesperson said the European Commission was preparing for all the possible implications of a Trump presidency on trade in Europe.
Jacob Funk Kirkegaard, a senior fellow in Brussels at the Peterson Institute for International Economics, said few politicians in Europe take what Trump says literally.
“This is an absurd demand,” Kirkegaard said of Trump’s threats to Greenland. “The only logical way to look at it is that by making this absurd demand, Trump is seeking to obtain concessions that he would not otherwise be able to obtain.”
Kirkegaard said that if Trump follows through on his threat to implement tariffs on Denmark, he could expect a comprehensive response from the European Union. “The idea that he can pressure Denmark, as a single EU member state, to offer political concessions by threatening tariffs will invite retaliation from across the EU.”
Trump implemented tariffs against several countries and billions of dollars in products during his first term. But other tariff threats never materialized, and it is unclear how many of his new threats he will follow through on.
On Tuesday, the president-elect also reiterated a threat to impose “very serious tariffs” on Mexico and Canada, complained about the U.S. trade deficit with Canada and the European Union, and suggested renaming the Gulf of Mexico the “Gulf of America”.
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