Donald Trump's concern about the strategic positioning of Greenland is rational. But the way the US president has approached the issue is not – and could still rupture NATO and cause enduring harm to North Atlantic political and economic relations.

The question for those attending the World Economic Forum in Davos all week has been how to respond to Trump's ambition for the US to own Greenland by hook or by crook.

His speech on January 21 – which appeared to concede that the US will not take Greenland by force – and his subsequent claim of having negotiated what he referred to as a "framework agreement" with the Nato secretary-general, Mark Rutte, have at least given the assembled heads of state something to work with.

But America's allies are faced with a series of options. They could try to wait out the 1,093 days left in Trump's term in the hope that nothing drastic happens. They could appease Trump by conceding to some of his demands.

Or alternatively they could activate the economic "bazooka" threatened by the French president Emmanuel Macron – although this is now less likely due to Trump's decision to row back back on his threat to impose additional sanctions on countries that opposed his Greenland plans.

Finally, they could try to actively resist US aggression towards Greenland. Although, thankfully, Trump appears to have backtracked – for now – on his threat to use force.

A key strategic location

The US president's Davos speech pitched his interest in Greenland in strategic terms. The Pituffik space base (formerly Thule air base) is a prime location to monitor Russian and Chinese aerospace and maritime activities as well as being an early warning base for missile protection. This is increasingly important, given Russian military activity and stated claims to the polar region and China's reference to the Arctic in its "Polar Silk Road" strategy.

In economic terms, Greenland's melting ice has revealed the world's eighth-largest deposits of rare earth elements and an estimated 31 billion barrels of oil. These are important to the US, which is seeking to reduce its dependency on China and to exert its own mineral and energy dominance. In the Davos speech, Trump emphasised US energy requirements while claiming not to covet Greenland's mineral wealth.