What Trump’s minerals deal means for Ukraine

Has Donald Trump’s heavy-handed negotiation style scored a win, or have the Ukrainians managed to wrench a victory of sorts from the jaws of defeat?

Although the details are still unclear, Kyiv and Washington are confirming that a deal on mineral rights has been agreed, and that Volodymyr Zelensky will be on his way to the White House on Friday to sign on the dotted line. Trump has abandoned his ludicrously overblown demand for a $500 billion return on what has actually been no more than $120 billion given in total aid, through revenue from Ukrainian oil, gas and rare earth metals. Zelensky had understandably rejected this, saying “I am not signing something that ten generations of Ukrainians will have to repay.”

Instead, it seems that a fund for the reconstruction of the country will be established, with a substantial US stake, which will draw on a share of those revenues. The precise terms of the deal and the American share have yet to be confirmed, but it is clearly less onerous and humiliating than the original demand. It does not include though the long-term security guarantees that Kyiv had previously demanded as part of the deal. Still, the Ukrainians are hoping that by giving the Americans a vested economic interest, it will incentivize Trump, who continues to think more in terms of balance sheets than geopolitics, to think of their security.

This will not mean an instant bonanza for either Ukraine or the USA. Most of the country’s mineral resources are, after all, in the east of the country, and either now under Russian control or else close enough to the front line that efforts to develop and exploit them would essentially require an end to the fighting. In many cases, they will also need investment to exploit. 

Nonetheless, it does provide some hope for Ukraine that Trump is not looking to write them completely off. When asked what the deal gives the Ukrainians, he said “the right to fight on.”

Ukrainians don’t need Washington’s permission to fight on, but they do need continued US assistance, and this provides a welcome counterbalance to the spectacle on Monday of the USA siding with Russia to vote against a European-drafted resolution at the United Nations condemning Moscow’s invasion. Meanwhile, Trump gets to promise his America First base that he has won them a return on their investment, their money back “plus.”

This is a small mercy, but at least it means that Ukrainian security has not entirely been forgotten. A Ukrainian diplomatic source sighed that it was “better than I had feared, although not as good as I had hoped.” Trump said that security was an issue to be addressed “later on,” but with characteristic bravado added, “I don’t think that’s going to be a problem. There are a lot of people that want to do it, and I spoke with Russia about it. They didn’t seem to have a problem with it.”

Would that it were so simple. After all, while his forces are still grinding away on the front line, Vladimir Putin is also slyly trying to outbid Zelensky. He has proposed a deal to develop Russia’s mineral resources — and he would want to include those in the occupied Ukrainian territories — adding that Russia “undoubtedly” has “significantly more resources of this kind than Ukraine.” This is probably a non-starter (though in Trumpworld, “probably” is about as certain as anyone can be about anything), not least because an American president, unlike his Russian counterpart, cannot order companies to sign deals. Mindful of the legal and reputational risks of operating in occupied lands, as well as the losses suffered by other companies that were either forced to leave Russia or targeted by the Kremlin, it’s unlikely any would even contemplate this before a full peace deal had not only been signed but seemed to be holding.

More than anything else, it is a reminder of Trump’s overtly transactional approach and his unabashed use of America’s military and economic muscle. He opens negotiations with a tough, unrealistic bid, because he expects to be haggled down, but he ultimately wants to make a deal. This makes his position towards Moscow seem, on the face of it, contradictory or, to those still convinced he is somehow being controlled by Putin, suspicious. Yet it need not be so difficult. Trump will do what he feels he has to do to open negotiations, blithely convinced he can make a good deal. He offered concessions that weren’t really concessions — pretty much everyone knew that Ukraine would not be joining NATO in the foreseeable future or reconquering all the occupied territories — to get Putin to the table. Whether he can make a deal, let alone a good deal, remains to be seen.