President-elect Donald Trump’s return to the White House is just a few days away. However, he’s recently been dominating the U.S.’s foreign policy as if he were already the country’s leader. This became evident on Tuesday during a news conference at his Florida club, Mar-a-Lago. There, he discussed Canada, the Panama Canal, and the Gulf of Mexico (which he referred to as “the Gulf of America”), and he didn’t rule out the use of military or economic force. Among other things, he hinted at imposing “very high” tariffs on Denmark if the European country doesn’t cede the island of Greenland.
Interestingly, Trump’s recent statements and threats have drawn attention to a significant player in the Danish economy: Novo Nordisk.
Old interest, new rhetoric. Trump’s obsession with the U.S. taking control of Greenland isn’t new. His interest emerged during his previous term when he clashed with the Danish Prime Minister Mette Frederiksen over Copenhagen’s refusal to entertain the idea of selling the Arctic island. However, his current insistence and rhetoric are new. Additionally, the current context makes what seemed unlikely in 2019 feel much more plausible.
“An absolute necessity.” Trump will return to the White House with the support of the Republican Party, the conservative majority of the Supreme Court, and the experience gained from his previous term. Above all, the president-elect has been rallying support around three key objectives: reclaiming control of the Panama Canal, incorporating Canada as a state of the U.S., and asserting U.S. control over Greenland.
“For purposes of National Security and Freedom throughout the World, the United States of America feels that the ownership and control of Greenland is an absolute necessity,” Trump said in December.
Refusing to rule out force to take Greenland. To dispel any doubts about his determination to take over the island, Trump said that he doesn’t rule out using economic or military force to gain control of Greenland or the Panama Canal.
“No, I can’t assure you on either of those two. But I can say this: We need them for economic security,” he said in Florida when a journalist asked whether he would avoid leveraging military action or economic coercion.
“Very high-level.” That wasn’t the only statement the president-elect made regarding Greenland. According to The New York Times, he also threatened Denmark with “very high-level” tariffs if he deemed it necessary to pursue his goal of bringing Greenland under U.S. control.
Panama and Canada.In his speech on Tuesday, Trump emphasized that the Panama Canal is “vital” for U.S. interests and criticized it’s currently “being operated by China.”
Regarding Canada, he expressed a desire to eliminate the border altogether: “You get rid of that artificially drawn line, and you take a look at what that looks like, and it would also be much better for national security. Don’t forget, we basically protect Canada.”
Beyond Copenhagen and Nuuk. Both the Danish and the Greenland governments are closely monitoring Trump’s words. They’ve also expressed their views on the future of the island. Frederiksen stressed that the “Greenland belongs to the Greenlanders” and considers any talk of its sale to be “absurd.” Meanwhile, Greenlandic Prime Minister Múte Egede is exploring the possibility of independence.
Trump’s threat of tariffs is likely causing concern within Danish industries. This is particularly true among major players like the pharmaceutical company Novo Nordisk, known for products such as Ozempic and Wegovy.
U.S. and Novo Nordisk. Barron’s recently reported on the significant implications the potential tariffs could have for Novo Nordisk. Although it remains unclear what specific tax policies Trump might employ to pressure Copenhagen over Greenland, the outlet notes that the U.S. is a crucial market for the Ozempic maker.
In the third quarter of 2024, the company generated around 60% of its revenue from the U.S. market. Data from Statista indicates that in 2023, 59% of the Danish drugmaker’s sales were concentrated in North America. This is significantly higher than the 22% from Europe, the Middle East, and Africa combined, or the 7% from China. Moreover, the share of North American sales has been steadily increasing.
No comment. Novo Nordisk declined to “comment on hypotheticals” when Barron’s asked about Trump’s recent remarks. Despite this, experts have speculated about the potential consequences of the president-elect imposing tariffs. Although Novo Nordisk is headquartered in Bagsværd, 7 miles away from Copenhagen, it also manufactures its drugs in several other countries, including the U.S.
“In principle, such tariffs would be relevant only for products imported directly from Denmark,” Cornell University professor Eswar Prasad told Barron’s. However, he notes that Trump could impose duties on products manufactured by Danish companies regardless of their production location.
Brett House, an analyst at Columbia Business School, points out another possible outcome of Trump’s actions. By creating uncertainty, the president-elect might encourage investment and production to shift to the U.S. This effect could occur even without the actual implementation of tariffs, given that the mere threat of tariffs could be influential.
Other key players. The situation is more complicated than it might seem and involves multiple players. Drugs like Ozempic and Wegovy are popular in the U.S., but they’re not the only options available. Mounjaro has emerged as a competitor to Ozempic and is supported by Eli Lilly, a multinational company based in Indianapolis.
In May 2024, CNN reported that the Food and Drug Administration had been warning about a shortage of GLP-1 drugs for some time. If Novo Nordisk’s production is impacted by “high-level” tariffs, this issue could become even more complicated.
A double-edged sword. Denmark also plays an interesting role in the U.S. healthcare landscape. Although it ranks 41st among Washington’s trading partners, Bloomberg reports that the European nation is a significant supplier of hearing aids, diabetes medications, and obesity medications.
Notably, as of November 2024, more than 75% of the value of U.S. insulin imports came from Denmark. Additionally, Denmark accounted for 25-30% of the hearing aids imported into the country.
“It doesn’t seem like a wise policy.” An aggressive tariff approach could also raise the prices of various goods, including GLP-1 drugs used for diabetes and obesity. This would present a challenge for Trump. In the end, rising prices, alongside immigration, were one of the key factors that contributed to his victory in November.
“Given how much of an issue inflation was during the last election, anything that would increase inflation doesn’t seem like a wise policy at the moment,” Jason Miller, a professor at Michigan State University, told Bloomberg.
Image | Focal Foto | Gage Skidmore | Chemist4U
Related | CagriSema Is Ozempic’s Newest Competitor. The Twist: It’s Made by the Same Company
View 0 comments