US and Ukraine finalize natural resources and reconstruction deal

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Damsana Ranadhiran
  • Update Time : Thursday, February 27, 2025
US President Donald Trump, the White House, Ukrainian President Volodymyr Zelensky, American, foreign policy

In a significant move that could reshape Ukraine’s economic landscape, the United States and Ukraine have reached an agreement granting American access to Ukraine’s rare earth minerals and other natural resources. The deal, confirmed by US President Donald Trump, is poised to provide substantial financial gains for Washington while further integrating Ukraine into the Western economic framework.

Speaking at the White House, Trump emphasized the scale of the deal, stating that it could be worth as much as $1 trillion. He claimed that this agreement ensures American taxpayers “get their money back, plus,” referring to the billions in aid provided to Ukraine since Russia’s full-scale invasion in 2022.

“We’re spending hundreds of billions of dollars on Russia and Ukraine fighting a war that should have never, ever happened,” Trump said. “This deal at least ensures that the US benefits from its investment.”

Despite Trump’s enthusiasm, the deal has sparked significant debate. Kyiv had previously rejected an earlier draft that would have transferred rights to $500 billion worth of natural resources to the US. The Ukrainian government pushed back against such terms, citing sovereignty concerns and a lack of security guarantees. However, after intense negotiations, a revised agreement was reached, dropping the $500 billion resource demand and introducing provisions for economic cooperation instead.

According to documents reviewed by multiple media outlets, the deal requires Kyiv to establish a fund that will allocate 50% of revenue from the “future monetization” of its state-owned mineral resources, including oil and gas. These funds will be directed toward investing in Ukrainian industries. Notably, existing revenue-generating resources, such as those controlled by Naftogaz or Ukrnafta, are reportedly not included in this arrangement.

The agreement does not specify the size of the US stake in the newly created fund, leaving those details for future negotiations. While it does reference a financial commitment from Washington to assist Ukraine, it lacks any binding US security guarantees-something that Ukrainian President Volodymyr Zelensky has repeatedly sought from Western allies.

The announcement of the deal comes amid a delicate political climate. Trump’s rhetoric toward Zelensky has been less than diplomatic in recent weeks. The former US president has openly criticized the Ukrainian leader, labeling him a “dictator” for suspending elections during wartime and accusing him of prolonging the war to continue benefiting from US aid. Trump’s stance has raised concerns in Kyiv and among European allies, as they fear his potential return to the White House could lead to a shift in US policy toward ending the war on terms favorable to Moscow.

The agreement, however, indicates that Kyiv is attempting to repair relations with the Trump administration amid these tensions. By securing economic cooperation with the US, Ukraine hopes to ensure continued financial and material support, even as political dynamics in Washington shift.

For the United States, this deal represents a significant strategic move. Access to Ukraine’s rare earth minerals-critical for advanced technology, including military applications-aligns with Washington’s long-term goal of reducing reliance on Chinese supply chains. The agreement also strengthens US economic influence in Ukraine, binding Kyiv more closely to Western financial interests.

Some analysts argue that while the deal lacks explicit security guarantees, the economic entanglement between Washington and Kyiv could serve as an implicit form of protection. A deeper US stake in Ukraine’s economic future may make it more difficult for any future administration to abandon the country entirely.

Although the agreement has been approved by Ukraine’s justice, economy, and foreign ministers, Zelensky still needs to secure parliamentary approval in the coming days. Bloomberg reports that the Ukrainian cabinet is expected to recommend signing the deal soon, though opposition voices within the government may challenge the terms.

Critics within Ukraine argue that signing away a substantial portion of future natural resource revenues undermines national sovereignty. Some lawmakers have expressed concerns that the deal disproportionately benefits the United States while failing to provide Ukraine with the security assurances it desperately seeks.

European capitals are watching these developments closely. While NATO and EU officials continue to back Ukraine against Russian aggression, there are growing concerns over Trump’s unpredictability and his transactional approach to foreign policy. If the US-Ukraine deal results in greater American control over Ukraine’s economic resources, European investors and stakeholders may find themselves sidelined.

Russia, meanwhile, is likely to frame this agreement as further evidence that the West is exploiting Ukraine for its own economic gain. Moscow has long claimed that Washington’s primary interest in Ukraine is strategic rather than altruistic, and this deal will likely be used as propaganda to reinforce that narrative among both Russian and Ukrainian audiences.

As Ukraine faces mounting war costs and economic devastation, the deal with the US could provide much-needed investment and infrastructure rebuilding. However, the lack of security guarantees remains a glaring omission. Kyiv’s leadership must weigh the economic benefits of closer ties with Washington against the risk of losing strategic autonomy over its natural resources.

If the Ukrainian parliament approves the deal, it will mark a new phase in US-Ukraine relations-one defined by economic integration rather than purely military aid. While this could provide long-term stability for Ukraine’s economy, it also raises questions about the nation’s ability to maintain control over its own natural wealth.

With Zelensky and his government facing increasing pressure both domestically and internationally, how Ukraine navigates this agreement will have lasting implications. The coming weeks will determine whether this deal is a turning point for Ukraine’s economic revival or a concession that sparks further political division.

For now, the agreement remains a complex and contentious development in an already fraught geopolitical landscape.

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Avatar photo Damsana Ranadhiran, Special Contributor to Blitz is a security analyst specializing on South Asian affairs.

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