The United States and Ukraine have officially signed an economic partnership agreement that grants Washington access to Kyiv’s vast mineral resources. In exchange, the US will set up an investment fund aimed at bolstering Ukraine's economy. This significant deal has been in the works since US President Donald Trump resumed presidency in January and marks a pivotal shift in the relationship between the two nations.
The final version of the agreement is reportedly more balanced than earlier drafts, which favored US interests. Unlike previous proposals, the current deal stipulates that future American military assistance to Ukraine will be counted as part of the US investment into the fund. This adjustment avoids demands for reimbursement for past financial assistance, reflecting a more equitable approach.
This partnership comes after weeks of intense negotiations that sometimes became contentious, temporarily halting Washington’s aid to Ukraine. In a call with NewsNation, Trump emphasized that he designed this deal to “protect” Washington’s contributions to the Ukrainian war effort. “We made a deal today where we get, you know, much more in theory than the $350 billion, but I wanted to be protected,” Trump stated. It is essential to clarify that Trump has incorrectly claimed the US has provided Ukraine with $350 billion since the Russian invasion began in February 2022; the actual figure is closer to $120 billion, according to the Kiel Institute for the World Economy.
During a weekend meeting with Ukrainian President Volodymyr Zelensky, Trump conveyed that it would be beneficial for Ukraine to sign the agreement, especially considering Russia’s military capabilities. Among the agreement’s key terms, Ukrainian Economy Minister Yulia Svyrydenko emphasized that “full ownership and control” of the resources will remain with Ukraine. “All resources on our territory and in territorial waters belong to Ukraine,” she asserted, affirming that decisions regarding extraction will solely be made by the Ukrainian state.
The signing of the agreement nearly faced delays due to last-minute disputes over documentation, but both sides ultimately reached a consensus. Although the specifics of the agreement remain confidential, Ukrainian Prime Minister Denys Shmyhal assured that it would not retroactively include assistance provided prior to its signing. He described the deal as “an equal and beneficial international agreement” focused on joint investments for Ukraine's development and recovery.
The US Treasury Department's announcement of the agreement reflected a stronger commitment to Ukraine compared to previous statements from the Trump administration, explicitly labeling the conflict as “Russia’s full-scale invasion” of Ukraine. Treasury Secretary Scott Bessent emphasized that the agreement signifies a commitment to a peace process centered on a “free, sovereign, and prosperous Ukraine.” He reiterated that no individuals or states that have supported the Russian military will profit from Ukraine's reconstruction.
Bessent stated, “We look forward to quickly operationalizing” the agreement; however, the immediate implementation of new mining projects and collaborations remains uncertain due to ongoing hostilities in the region.
The road to this agreement has been fraught with challenges. Zelensky was expected to finalize the deal during a trip to Washington in February, but the signing was postponed after a contentious Oval Office meeting. One major sticking point was the provision of security guarantees, which Trump initially resisted, preferring to discuss those after the agreement was signed. This led Zelensky to characterize the draft agreement as potentially compromising Ukraine's sovereignty.
Despite a temporary suspension of US aid to Ukraine following this meeting, assistance has since been restored, prompting Ukraine’s European allies to increase their support for the nation. Trump had previously portrayed the agreement as Ukraine “paying back” for US aid since the beginning of the Russian invasion.
Under the new deal, the US and Ukraine will establish a joint investment fund with equal contributions from both nations. Notably, new military aid from the US will also be counted as a contribution to this fund. This initiative reflects a strategic interest in Ukraine’s mineral wealth, as the country possesses deposits of 22 out of the 50 materials deemed critical by the US Geological Survey. These include rare earth minerals vital for electronics, clean energy technologies, and various weapon systems.
Historically, the global supply of rare earth minerals has been dominated by China, prompting Western nations to seek alternative sources, including those in Ukraine. A memorandum of understanding established under the Biden administration aimed to promote investment in Ukraine’s mining sector, encouraging American companies to engage in this strategic area while Ukraine implements good business and environmental practices.
In conclusion, the newly signed economic partnership agreement between the US and Ukraine represents a critical step forward in their collaboration, particularly concerning Ukraine's mineral resources. As both nations work towards operationalizing this agreement, the implications for Ukraine's economic recovery and security landscape will be closely monitored.
