Deutsche Bank's assessment suggests a deal that does not restrict Greenland/Danish sovereignty appears increasingly improbable.

According to Zhui Feng Trading Desk, the judgment delivered by Deutsche Bank in its latest research report is becoming ever clearer—the realistic possibility of a "transaction plan" that can satisfy Trump's strategic objectives while simultaneously preserving the institutional integrity of NATO and the EU, all without crossing the sovereignty red lines of Denmark and Greenland, is rapidly diminishing.

The Greenland issue is evolving from a diplomatic game into a high-intensity geopolitical confrontation centered on tariffs, security, and institutional boundaries.

The report points out that Trump may seek a substantive shift in the Greenland situation before the November midterm elections, indicating that the coming months will be a critical window period.

From Diplomatic Pressure to Economic Coercion: The Negotiation Logic Has Shifted

On the 17th, US President Trump announced on social media that a 10% tariff would be imposed on goods imported from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland starting February 1st. He further declared that the tariff rate would increase to 25% from June 1st, and remain so until the relevant parties reach an agreement on the US's "comprehensive and thorough purchase of Greenland."

The countries listed on the tariff list—Denmark, the UK, Norway, Sweden, France, Germany, the Netherlands, and Finland—are without exception NATO members that provide military or security resources to Greenland. Deutsche Bank notes that this arrangement itself indicates that the US is not simply pressuring Denmark, but is conducting a "cost reassessment" of the entire European security cooperation system through economic means.

This signifies a change in the nature of the Greenland博弈. Tariffs are no longer just a background variable outside the negotiating table; they are now explicitly used as a core tool to alter the incentives for European decision-making. Diplomacy is giving way to economic coercion, significantly compressing the space for negotiation.

Why Is a "Deal Without Sacrificing Sovereignty" Becoming Increasingly Difficult?

Prior to the escalation, Europe had indeed contemplated a compromise path:

Expand the deployment and operational authority of US forces in Greenland. Grant the US greater leadership in Arctic defense, space monitoring, and intelligence systems. Address Trump's political demand for "results" through investment, infrastructure, and mining cooperation.

The common feature of these proposals is the ceding of functional control while retaining legal sovereignty. However, Deutsche Bank points out that such schemes are facing structural failure for several reasons:

Trump's objective has shifted from "participation" to "control"; he seeks not just greater usage rights, but a form of long-term control sufficient to exclude Russia and weaken Europe's voice. The negotiation has been deliberately pushed towards a "black or white" choice; the phrasing "complete purchase" inherently negates any middle ground, making any compromise appear insufficient. The tariffs impose a clear time pressure; the June 1st deadline transforms the issue from a long-term consultation into a short-term博弈, constraining Europe's room for maneuver.

Under this logic, a "deal without sacrificing sovereignty" is no longer the baseline scenario but is gradually receding from the realm of realistic options.

Historical Precedents: Why the US "Toolkit" for Territorial Expansion is Cause for Alarm

Deutsche Bank's report specifically reviews historical cases of US territorial expansion, not to draw emotional analogies, but to demonstrate a highly consistent pattern of action.

Hawaii (1890s): US commercial interests first applied economic pressure on the Hawaiian monarchy. When the monarch attempted to uphold sovereignty, US officials supported a coup. US Marines landed under the pretext of "protecting American lives and property," the insurgents established a provisional government, and the US formally annexed Hawaii in 1898. Panama Canal Zone (1903): When Colombia, which controlled Panama, refused a treaty granting the US control over a canal, the US switched its support to a Panamanian separatist movement and deployed naval forces to prevent Colombian troops from suppressing it. Days after Panama's independence, the US swiftly signed a treaty securing control of the Canal Zone. Puerto Rico (1898): The US gained control through military action defeating Spanish forces, then rapidly established a civil administration, integrating the territory into the US governance structure.

Deutsche Bank's implied conclusion is that the US does not necessarily require a one-time "annexation," but can gradually create a fait accompli through economic pressure, political intervention, and security involvement. This is the fundamental reason for Europe's high level of vigilance regarding the Greenland situation.

Europe Has Many Options, But Few Affordable Ones

Publicly, the EU's stance is unequivocal.

Both European Commission President Ursula von der Leyen and European Council President António Costa have stated that Trump's tariff threats would severely damage transatlantic relations, and that Europe will remain united, coordinated, and firm in defending Danish and Greenlandic sovereignty. However, Deutsche Bank's assessment is more sober: a significant gap remains between rhetoric and execution.

If an "acceptable agreement" cannot be reached, the EU theoretically possesses various tools:

Reciprocal tariffs or regulatory actions. EU-level financial or economic sanctions (including targeting US banks, restricting access to EU capital markets, limiting USD-EUR clearing). Activating the Anti-Coercion Instrument (ACI), employing tariffs, trade, and investment restrictions to counter economic coercion. Appealing to international law and UN mechanisms.

The real problem lies not in the existence of tools, but in whether Europe possesses sufficient unity, political resolve, and the capacity to withstand a full-scale escalation of economic confrontation with the US.

The Most Severe Scenario: Institutional Shock, Not Military Confrontation

Deutsche Bank clearly states that if the US were to take military action in Greenland, a European military response would be nearly impossible. Viable options would be highly constrained to diplomatic pressure, emergency consultations, and frameworks of international law and the UN. In such a scenario, what would truly be upended is not a specific territory, but the institutional foundations of NATO. Europe would be forced to reassess its security dependence on the US, its Arctic strategic layout, and its long-term alliance structure.

Synthesizing Deutsche Bank's analysis, the essence of the Greenland issue is no longer a contest of negotiation tactics, but a stress test concerning sovereignty, control, and institutional boundaries.

Under this logic, a transaction plan that does not "sacrifice" Danish sovereignty is not theoretically impossible, but in the realm of realpolitik, it is rapidly losing its supporting conditions. For markets, this implies that geopolitical risk is transitioning from an "occasional shock" to a structural variable requiring long-term pricing.