February 27, 2025

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Frozen Out: Great Power Competition In The Arctic Region

Last week, the Danish government announced it would increase its military budget by facilitating a $7 billion fund that would raise the country’s military spending up to 3 percent of gross domestic product (GDP) in this year and the following. For a country that has experienced little conflict in the modern era, this budget increase marks Denmark’s highest level of military spending in over half a century. This decision is largely driven by U.S. President Donald Trump’s comments on gaining control of Greenland, a territory colonized by Denmark, to which it remains closely tied through ongoing economic reliance on Danish subsidies.

Denmark, a NATO member, is increasingly concerned that the potential end of the war in Ukraine may leave an opening for Russia to escalate tensions with various NATO countries, including Baltic states. Denmark contends that the increase in its defense spending will allow for NATO to protect these areas while also providing for a heightened military defense in the Arctic, another region where Russia has demonstrated strategic ambitions. According to James Patton Rogers, a drone expert and advisor to NATO, Russia began building its Arctic drone arsenal as early as 2014, putting Russia at the forefront of Arctic technology. "We're moving towards a point where Russia will not only have unarmed surveillance drone systems along the Northern Sea Route, but potentially armed systems that are constantly patrolling those areas as well," Rogers told Reuters in early February. Although NATO has identified the Arctic as an area of concern, its ability to deploy this technology to the region has been incredibly slow, especially as the severe temperatures in the Arctic can easily cause malfunctions.

The U.S. has already invested in some long-range drones to monitor activity in the Arctic, but these drones still face weather-related risks. Nevertheless, the Department of Defense has announced that it will purchase tens of thousands of cheap drones to conduct “kamikaze missions” over the Arctic, though this brings immense concern regarding drone debris and its impact on the environment. Finland has been the first NATO member to adopt “winter-proof” drones in 2023 by purchasing French manufactured drones that can allegedly be used in minus 36 degrees Celsius. Other countries with ties to the Arctic are also planning to utilize this technology, with the Arctic region continuing to grow as a hotspot for activity and great power competition.

The increase in investment by NATO and non-NATO members alike highlights the strategic importance of the region, which may explain why the U.S. has ramped up its rhetoric concerning Greenland. However, Trump’s recent comments about Greenland are not the first he has shared regarding his desires to acquire the Arctic island.  In 2019, Trump expressed his interest in purchasing Greenland to Danish Prime Minister Mette Frederiksen, to which the prime minister responded that the land was “not for sale.”

However, in the current instance, Trump has said at a press conference in January that he “can’t assure” whether the U.S. will decide to use military force to secure Greenland (he said the same of the Panama Canal). He has also threatened the use of economic pressure, stating that he would “tariff Denmark at a very high level” if Copenhagen was unwilling to concede to his plans to purchase Greenland. Trump has also claimed that these areas, also including Canada, are "an absolute necessity” for American national security. Greenland’s strategic position in the Atlantic Ocean provides the shortest route between North America and Europe, heightening its geostrategic value in terms of military operations and missile defense systems.

Trump’s recent assertive strategy in relation to the Arctic primarily hinges on undermining Chinese influence in the region, sending a robust message to Beijing that the U.S. will not allow China to expand its Arctic interests. Increasingly, the Arctic is becoming a region critical to great power competition, where the U.S., China, and Russia compete for access and advantage.

Russia remains the most dominant power in the Arctic from an economic and military standpoint, with military bases, icebreakers, and nuclear submarines. Moscow has also engaged in joint military drills with Beijing in the Arctic and economically, has expanded its oil, gas, and shipping routes along the Northern Sea Route. While climate change is wreaking havoc in many parts of the world, with coastal flooding, wildfires, and other extreme weather events, melting sea ice is providing opportunities for countries to find new shipping lanes and begin exploration on access to natural resources that were previously unavailable.

Trump appears less focused on great power competition than previous U.S. presidents, as evidenced by his recent isolationist policies and actions. These include tariff wars with Mexico, Canada, China, and, for a time, Colombia, as well as his growing relationship with Russia and his eagerness to end the Russo-Ukrainian war quickly, regardless of the cost. This shift in priorities is perhaps particularly evident in the recent and significant realignment of U.S. Arctic policy. On February 18, at a meeting in Saudi Arabia, Russia and the United States discussed potential collaboration on Arctic energy projects and explored ideas for joint ventures in the region. This development suggests a shift away from NATO-led multilateral frameworks towards U.S.-Russian bilateral cooperation, challenging the post-2022 Arctic order. Furthermore, it highlights the Trump administration’s readiness to directly engage with Russia, departing from previous isolationist stances and could indicate a strategy to drive a wedge between Russia and China in the Arctic.

This economic cooperation could ultimately transform regional power dynamics by undermining NATO’s influence and marginalizing other smaller “Arctic nations” – states that hold land area within the Arctic Circle comprising Canada, Denmark, Iceland, Sweden, Finland, Norway, Russia and the U.S.- in decision-making processes in the region. Moreover, this move could weaken the impact of Western economic sanctions against Russia. Ultimately, the potential for future economic alignment with Russia in Arctic ventures presents a new challenge to the already deteriorating transatlantic relations and can be viewed as a threat to the united European front against Russian aggression, especially if European powers view this as an opportunity to re-engage with Russia on specific issues.

Trump’s recent attention to the Arctic is also connected to, and possibly primarily focused on, the growing accessibility of the Northern Sea Route and the Northwest Passage. These passages could offer increasingly accessible and more lucrative Trans-Arctic shipping routes in comparison to the Suez and Panama canals, especially, as mentioned above, climate change accelerates. Estimates suggest that in the future these routes could be up to 33 percent more profitable than the Suez Canal, through the reduction of shipping times and the circumvention of traditional shipping checkpoints.

Ongoing disruptions in global shipping, such as the Houthi attacks in the Red Sea, as well as severe drought in Panama have highlighted vulnerabilities in traditional maritime chokepoints, underscoring the impetus to find viable alternatives. Russia and China are aggressively pursuing their Arctic ambitions. Despite not being an Arctic nation, China has stated its ambitions of becoming a “near-Arctic” state and is seeking to establish a foothold in the region through its “Polar Silk Road” initiative, comprising an element of its broader Belt and Road strategy. While in the near to medium term, these routes remain commercially unviable due to operational challenges, the long-term potential is significant. As melting ice transforms global shipping patterns, the region is rapidly becoming a potential key flash point for economic confrontation between major powers.