Overview

For much of the post–World War II era, territorial borders among major powers were treated as politically frozen. While wars, interventions, and proxy conflicts occurred, formal territorial transfer remained exceptional, constrained by security guarantees, alliance structures, and strong normative taboos. In recent years, however, a subtle shift has emerged. Territory has not returned as a primary objective of conquest, but as a variable increasingly referenced in strategic discussions surrounding security, stability, and long-term risk management. This analysis examines how territory has begun to reappear in great-power politics as a conceptual bargaining asset, not as an established policy instrument. Using three structurally distinct cases— Greenland, Ukraine, and Taiwan—it explores the conditions under which territory becomes discussable, the pathways through which it enters strategic discourse, and the constraints that continue to limit its negotiability. The purpose of this analysis is not to predict outcomes or imply policy changes, but to identify where the boundaries of non-negotiability are being tested, reinforced, or carefully maintained in an evolving international environment.

I. The Postwar Freeze — And Why It Is Breaking

Territory as a Post-1945 Taboo

Following World War II, the international system developed a strong aversion to territorial revision among major powers.

This post-1945 territorial freeze was institutionally grounded in the prohibition on the use of force enshrined in the Charter of the United Nations, and later reinforced by the Helsinki Final Act, which codified the principle of border inviolability within the European security order.

Borders were treated as fixed, even when governments changed or conflicts erupted. Stability was upheld not by the absence of force, but by a combination of factors: Credible security guarantees, particularly from the United States Nuclear deterrence, which raised the cost of escalation Alliance cohesion, which reduced unilateral action Economic integration, which reframed conflict as mutually costly Within this framework, annexation and negotiated territorial transfer became politically illegitimate, even when power asymmetries existed.

Conditions for Re-Entry

Territory begins to re-enter strategic consideration when three conditions emerge simultaneously: Security provision becomes conditional, delayed, or costly Alliance cohesion weakens or fragments Major powers prioritize irreversible assets over flexible arrangements When these conditions align, territory becomes attractive not as a trophy, but as a stabilizing variable— something that can lock in outcomes when other guarantees appear uncertain.

II. Fragmentation, Scale, and the Limits of Global Coordination

The Arithmetic of Sovereignty

On the eve of the First World War, the international system comprised roughly 50 sovereign states. By the end of World War II, that number had expanded to approximately 130.

This expansion is empirically observable in the growth of United Nations membership, which increased from roughly 50 states before World War I to nearly 200 recognized members today, providing a measurable basis for the coordination-cost dynamics described here.

Following the end of the Cold War, the global system now consists of close to 200 recognized states. Setting aside normative or moral judgments, this demographic expansion of sovereignty produces a measurable structural outcome: the efficiency of global coordination declines as the number of actors increases. As the number of states rises, the average economic and industrial scale of each state necessarily decreases. Projects of meaningful size—whether in infrastructure, defense production, energy transition, or advanced manufacturing—increasingly require multi-country coordination. Each additional sovereign interface introduces legal, political, regulatory, and institutional friction.

Scale Mismatch in a High-Productivity Era

Modern production systems demand scale, continuity, and synchronization. As productivity advances, the threshold for viable coordination rises accordingly. Smaller and less-capable states face growing difficulty meeting these requirements, not due to intent or policy failure, but due to structural constraints. The result is a widening coordination gap: an increasing share of global actors are unable to participate effectively in high-complexity projects. Cooperation becomes slower, more fragile, and more costly to sustain.

Inefficiency as a Strategic Cost

This fragmentation carries a second-order effect: systemic resource waste. Capital, labor, and materials are diverted into duplication, compliance, and transaction management rather than output. From a purely structural perspective, fragmentation reduces aggregate efficiency, even in the absence of conflict. As coordination bottlenecks intensify, larger powers face mounting incentives to internalize scale—through consolidation of supply chains, reduction of external dependencies, or control over territorially bounded systems. In this context, territory regains relevance not primarily as an object of ideology, but as a mechanism for restoring scale and reducing coordination overhead.

III. Davos 2026: From Alliance Assumptions to Transactional Security

Scenario note: Davos 2026 is used here as a shorthand scenario to describe an emerging shift toward transactional security, rather than a claim about a specific closed-door outcome.

The End of Implicit Guarantees

The 2026 World Economic Forum in Davos marked a visible tonal shift in transatlantic security discourse. Where previous years emphasized globalization, coordination, and shared norms, discussions in 2026 reflected a colder form of realism—one centered on scarcity, leverage, and conditional commitment. Rather than debating how to expand collective prosperity, the underlying question became how actors secure leverage when resources, attention, and security guarantees are constrained. In this context, alliances were no longer treated as assumption-based frameworks, but as projects requiring continuous payment and justification.

Security as a Bill, Not a Given

Remarks delivered by the United States framed security commitments in explicitly transactional terms. Support for NATO was affirmed, but no longer described as unconditional. The implicit message was clear: security provision now carries a price, measured in spending levels, industrial capacity, and political alignment. Notably, European leadership did not contest this framing. Instead, it was largely internalized. This signaled a collective adjustment: coercion and conditionality were no longer viewed as aberrations, but as acceptable tools for mobilization within the alliance. Former assumptions of automatic solidarity gave way to project-based bargaining, where commitments are evaluated against concrete deliverables.

Financial Mobilization Without Industrial Readiness

Europe’s immediate response to pressure was fiscal. Commitments approaching €800 billion in defense spending over four to five years, alongside a €150 billion joint procurement financing mechanism, represent an unprecedented mobilization of capital. Yet Davos discussions exposed a structural constraint: Europe possesses the ability to allocate funds, but lacks the industrial depth to rapidly convert capital into output. Defense production capacity on both sides of the Atlantic remains limited, a consequence of three decades of post–Cold War drawdown. The reliance of European states on external suppliers—even outside the traditional transatlantic base—underscores the erosion of domestic manufacturing resilience. 3 Cost disparities highlight the issue. Due to fragmented supply chains and limited scale, the unit cost of key munitions within NATO systems significantly exceeds that of peer competitors. This implies that equal financial outlays do not translate into equal battlefield capacity.

Procurement Bias and Innovation Asymmetry

European defense spending remains heavily skewed toward procurement rather than research and development. Only a small fraction is allocated to innovation, reinforcing long-term dependence on external technological leadership. As a result, current mobilization risks becoming an exercise in acquiring legacy systems rather than building sustainable strategic autonomy. Financial readiness, in this context, exposes rather than resolves industrial fragility.

Bottlenecks in the Physical Economy

The core constraints are not fiscal, but material and human. Shortages span the full production chain—from basic inputs and specialized chemicals to skilled labor. Decades of efficiency-driven industrial models optimized for low inventory and just-in-time delivery have proven ill-suited for rapid surge production. Defense orders have expanded faster than output, revealing a gap between nominal demand and physical capacity. This mismatch defines the next phase of competition.

The Return of Industrial Time as a Strategic Variable

Beginning in 2026, the global defense sector is entering a period of accelerated industrial restructuring. Emergency budgets, regulatory adjustments, and long-term investment plans reflect a shift away from peacetime fiscal discipline toward mobilization under uncertainty. Trillions in committed capital now confront the slower rhythms of mines, factories, and training systems. In this environment, production capacity becomes a form of sovereignty, and delivery timelines become a measure of strategic credibility.

IV. Territory as an Asset, Not a Trophy

From Conquest to Reference Point

In contemporary geopolitics, territorial change rarely begins with overt conquest. Instead, territory reappears indirectly, framed through language such as: Security necessity Temporary control Administrative adjustment Strategic rationalization This reflects a shift from expansion as ideology to territory as instrument.

Why Territory Appeals in Uncertain Systems

Territory offers several attributes that other strategic tools do not: Irreversibility: once altered, borders are difficult to restore Visibility: territorial outcomes are legible to domestic audiences Durability: they outlast electoral cycles and policy shifts Multiplicity: they carry military, economic, and symbolic value simultaneously As uncertainty increases, these attributes gain relative weight.

V. Quantifying the Payoff—and the Price

When territory re-enters strategic discussion, it is often framed as a source of tangible gain: resources, security depth, or leverage. Yet historical experience and available data suggest a persistent asymmetry— the benefits of territorial control are often delayed, conditional, and uncertain, while the costs are immediate, compounding, and difficult to reverse. Examining three contemporary cases—Ukraine, Greenland, and Taiwan—illustrates how the balance between payoff and price varies across contexts, but rarely tilts cleanly in favor of the controlling power.

Russia and Ukraine: Assets Under Pressure

From a narrow material perspective, long-term control over parts of Ukraine could offer Russia access to industrial assets and agricultural output, particularly in eastern regions historically associated with heavy industry and grain production. Prior to the full-scale war, conflict in eastern Ukraine had already imposed losses exceeding one hundred billion dollars on Ukraine’s economy, underscoring the scale of capital destruction involved. However, these potential gains are offset by sustained and measurable costs. Russia’s military expenditures have risen to historically high levels as a share of GDP, while energy revenues—long a fiscal anchor—have declined under sanctions. Independent estimates place the broader economic cost of the war in the multi- trillion-dollar range when lost output, foregone investment, and long-term distortion are considered. Most critically, territorial control in a high-resistance environment imposes indefinite governance and security obligations. Infrastructure repair, population management, and internal security consume resources long after active combat subsides, turning nominal assets into ongoing liabilities.

The United States and Greenland: Strategic Option Value

Greenland presents a different profile. Its value lies less in immediate extraction than in optionality. Geological surveys indicate significant potential hydrocarbon resources offshore, while its location anchors early-warning, space surveillance, and Arctic access. Yet these advantages materialize slowly. Resource development faces environmental, logistical, and economic constraints that stretch timelines into decades. More immediate are the political costs: altering sovereignty arrangements within an alliance framework risks eroding trust and accelerating demands for strategic autonomy among partners. In this case, the payoff resembles a long-dated strategic option, while the price is paid upfront in alliance friction and institutional strain.

China and Taiwan: Concentrated Value, Systemic Risk

Taiwan’s economic weight is unusually concentrated. The island accounts for a majority of global contract chip manufacturing capacity and an even larger share of advanced-node production. In theory, this concentration confers significant structural leverage. In practice, however, semiconductor value depends on uninterrupted integration with global equipment suppliers, materials providers, customers, and export markets. Large-scale disruption would likely degrade this value rapidly. Economic modeling suggests that a major conflict over Taiwan could impose costs measured in trillions of dollars globally, with substantial spillovers to the initiating power. Here, the paradox is stark: the more valuable the asset, the more fragile it becomes under coercive acquisition, as the conditions that sustain its value are precisely those most vulnerable to disruption.

A Common Pattern

Across these cases, a consistent pattern emerges. Territorial control promises strategic leverage and long- term optionality, but demands continuous expenditure—financial, political, and institutional—to sustain. The apparent gains are often front-loaded in rhetoric, while the costs accumulate quietly over time. This asymmetry helps explain why territory, once reintroduced into bargaining logic, rarely delivers the clean, decisive benefits its advocates expect.

VI. Case I — Greenland: Territory Inside the Alliance

Structural Distinctiveness

Greenland represents a unique category of territorial consideration. It is not an active conflict zone, nor the core territory of an adversary. It exists within a broader alliance system, with security already heavily underwritten by the United States.

From Access to Jurisdiction

Existing arrangements provide extensive military access and operational flexibility. The analytical shift lies not in capability, but in jurisdiction. Sovereignty consolidates decision-making authority, reduces coordination costs, and eliminates alliance veto points.

Low Moral Friction

Several factors reduce resistance to discussion: A small population Absence of active warfare Framing as alliance optimization rather than coercion This makes Greenland a low-friction environment for examining how territory can be referenced within a friendly system without triggering immediate normative backlash.

VII. Case II — Ukraine: Territory as a Ceasefire Currency

War, Fatigue, and Constraint

As conflicts extend in duration, the strategic calculus shifts. Absolute outcomes become less attainable, while stabilization gains value. External supporters reassess costs, escalation risks, and long-term sustainability.

Territory in Conflict Resolution Discourse

Within this context, territory enters discussion not as a reward, but as a currency for de-escalation:

  • De facto control versus de jure recognition
  • Frozen lines versus permanent borders
  • Territorial restraint exchanged for security assurances

A Transaction Under Constraint

This does not signal a return to classical expansionism. Instead, it reflects transactional realism under conditions of exhaustion, where territory becomes a variable in managing risk rather than expressing ambition.

VIII. Case III — Taiwan: Territory Under Strategic Discourse, Not Negotiation

A Fundamentally Different Category

Unlike the previous cases, Taiwan is not the subject of any formal or informal territorial negotiation. There is no recognized bargaining framework, nor any indication that sovereignty is being discussed as a negotiable variable by the parties directly involved. Taiwan occupies a different analytical space: territory under strategic discourse.

Language as the Early Signal

The analytical concern does not stem from official policy positions, which remain clearly articulated, but from how Taiwan increasingly appears in broader strategic discussions among analysts and observers. These discussions often reference:

  • Strategic stability
  • Deterrence credibility
  • Regional risk management
  • Long-term commitment assessment

Pre-Pricing Without Negotiation

Territory can become strategically sensitive before any negotiation occurs. When hypothetical trade-offs or conditional scenarios become normalized in analytical language, the boundary between non-negotiable and discussable becomes less rigid. This process alters perception, not policy. Structural Sensitivity Taiwan’s sensitivity derives from: Its centrality to regional security architecture Its symbolic role in alliance credibility Its exclusion from any bargaining framework Paradoxically, the absence of negotiation heightens the importance of discourse.

IX. Comparing the Three Cases

Dimension Greenland Ukraine Taiwan
Status Peace Active conflict Latent tension
Alliance Role Internal External support Ambiguous
Negotiation Stage Emerging Ongoing None
Primary Risk Precedent Normalization Discursive erosion

Together, these cases illustrate that territory re-enters politics through multiple pathways, not a single model.

X. Strategic Implications

For Small and Medium Powers

  • Delay entry into bargaining logic
  • Increase procedural and political friction
  • Preserve non-negotiability through consistency

For Alliances

  • Territorial integrity depends on credible, unconditional guarantees
  • Conditional protection invites renegotiation

For Major Powers

  • Low-cost territorial success resets expectations
  • Early precedents shape future bargaining environments

Conclusion

Territory is re-entering great-power politics not as a normalized object of exchange, but as a strategic reference point —invoked to assess risk, signal commitment, and manage uncertainty. This does not indicate a return to classical territorial revisionism, nor does it suggest that borders are broadly becoming negotiable. Instead, it reflects a narrower shift in strategic reasoning: when security guarantees are questioned or recalibrated, territory is discussed more frequently, even as formal protections remain in place. The central risk lies not in immediate bargaining, but in the gradual erosion of the conceptual firewall separating what is considered non-negotiable from what becomes hypothetically discussable. Stability depends not only on policy, but on the clarity and discipline of strategic language. In this sense, the critical question is not whether territory will be traded, but how international actors preserve the conditions under which territory does not need to be discussed at all.

Related: Why Trump Wants Greenland: The $100M Gold Proposal

Appendix: Indicative Economic and Strategic Metrics

This appendix provides contextual, non-exhaustive reference data to illustrate the scale and structure of potential benefits and costs discussed in the analysis. Figures are indicative, approximate, and subject to change. They do not imply policy intent, feasibility, or outcomes.

A. Russia and Ukraine — Indicative Costs and Constraints

Military expenditure burden: Russia’s military spending has risen to historically elevated levels, reaching roughly 7% of GDP in 2024–2025, reflecting sustained wartime mobilization and long-term fiscal pressure (SIPRI). Energy revenue compression: Energy revenues, traditionally a core pillar of Russia’s federal budget, have declined materially under sanctions and price caps, increasing reliance on non-energy taxation and debt issuance (Financial Times reporting based on Russian budget data). Reconstruction scale: Independent assessments estimate Ukraine’s recovery and reconstruction needs at over USD 500 billion over the coming decade, underscoring the magnitude of capital destruction and the long-term economic burden associated with territorial control in a high- resistance environment (World Bank). Aggregate economic loss estimates: Academic and policy-oriented modeling suggests that the broader economic cost of the conflict, including lost output and foregone investment, could reach multi-trillion-dollar levels over time (CEPR VoxEU). Interpretive note: Material assets obtained through territorial control are offset by persistent governance, security, and reconstruction obligations that are difficult to cap or amortize.

B. United States and Greenland — Option Value and Time Horizon

Hydrocarbon potential: The U.S. Geological Survey estimates mean undiscovered conventional oil and gas resources in East Greenland Rift Basins at approximately 31 billion barrels of oil equivalent, highlighting long-term resource optionality rather than near-term revenue. Strategic positioning: Greenland hosts critical early-warning and space surveillance infrastructure relevant to Arctic and missile-detection architectures, offering strategic utility independent of resource extraction (U.S. and allied defense assessments). Development constraints: Extreme climate, infrastructure limitations, environmental regulation, and market conditions imply development timelines measured in decades rather than years. Alliance and institutional costs: Any alteration to sovereignty arrangements within an alliance context would likely impose non-financial costs, including trust erosion and increased pressure for strategic autonomy among partners (European policy and financial press analysis). Interpretive note: Greenland’s value resembles a long-dated strategic option whose upfront costs are primarily political and institutional, while financial returns remain uncertain and distant.

C. China and Taiwan — Concentrated Value and Systemic Risk

Semiconductor concentration: Taiwan accounts for more than 60% of global foundry capacity and over 90% of advanced-node semiconductor manufacturing, with the sector contributing approximately one-fifth of Taiwan’s GDP (U.S. Department of Commerce, International Trade Administration). Supply-chain dependence: The economic value of this concentration depends on uninterrupted integration with global equipment suppliers, materials providers, design ecosystems, and export markets. Modeled global impact: Scenario-based economic modeling suggests that a major Taiwan contingency could impose global economic costs on the order of USD 10 trillion (scenario-based, modeled estimate), reflecting trade disruption, financial market stress, and technology supply shocks (Bloomberg Economics).

Value fragility: Disruption risks imply that coercive acquisition could rapidly degrade, rather than preserve, the very economic value concentrated in the semiconductor ecosystem. Interpretive note: High-value assets embedded in global systems are particularly sensitive to disruption; their strategic worth is inseparable from the stability of the surrounding order.

Counterfactual Conditions

The argument advanced here would be materially weakened if, over a sustained period of observation, the following patterns were consistently observed:

  • Major powers systematically avoided territorial language in ceasefire frameworks, peace negotiations, and postwar settlement proposals.
  • Alliance security commitments reverted to explicit, unconditional guarantees that excluded transactional bargaining or issue linkage.
  • Policy discourse surrounding Taiwan remained durably framed as non-negotiable across administrations, without incremental normalization of trade-off language.

Sources

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