The final day of winter, according to Ukrainian tradition, witnessed an extraordinary public spat between President Zelensky, President Trump, and Vice President J.D. Vance, and as Zelensky emerged empty-handed from the White House, unable to secure the continuation of the meeting, let alone security guarantees, it may well have spared Ukraine a perilous economic future.
Only two days before the historic White House spat did we see the text of the agreement that was signed by the head of the US Treasury and the Minister of Economy of Ukraine, one that would have locked Ukraine into sharing 50% of the revenue (not just profits) from its natural resources with a Reconstruction Investment Fund part-owned by the United States. Ukraine, it seems, was about to part with vast sums of money it never really had to begin with, an arrangement that could have proved disastrous in the long run.
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At its core, the deal would have diverted half of all future earnings from Ukraine’s state-owned minerals, oil, gas, ports, and critical infrastructure to the jointly managed fund. Conventional mining projects already take five to ten years just to break even and sometimes up to fifteen years to deliver full returns on investment. Under this proposed scheme, 50% of revenue would be siphoned off straight away, drastically delaying any realistic payback window for new ventures.
Staggeringly, that split applies to gross revenue, meaning even if a project generates billions in sales but runs at near-zero profit in its early years, the state would still be obliged to funnel half of that revenue to the fund, potentially forcing Ukrainian taxpayers to shoulder significant losses.
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Moreover, the notion of “infrastructure relevant to natural resources” was defined so broadly that anything from ports and railways to utility companies and hydropower stations tied to extraction sites could come under the fund’s remit. It’s not just about copper, coal, or natural gas; almost any infrastructure that helps move or power these projects might have been fair game, hemorrhaging income away from Ukraine’s national coffers.
This arrangement could also repel would-be investors. It’s hard to imagine many private financiers rushing into deals where a hefty chunk of top-line revenue disappears from day one. In other words, the high start-up costs and the protracted timelines typical of the mining sector would become even less appealing. Borrowing costs would rise; most creditors would simply walk away. Indeed, this would be a part of a vicious cycle, driving the cost of the venture even higher and rendering the profit margin even more miniscule thus laying more of the payback burden on the taxpayer.
Given the fiasco that played out in Washington, there’s a certain irony in Zelensky’s fruitless appeal for military assistance inadvertently saving his country from a questionable economic tether. The published summary of the Bilateral Agreement hinted at a subsequent “Fund Agreement,” presumably detailing the specifics. That final text never surfaced. By all appearances, though, Ukraine may have dodged a deal that would have left it mired in debt and beholden to American decision-makers for the foreseeable future.
While the abrupt White House departure of the Ukrainian president cannot be counted as a diplomatic triumph, it may prove a strange stroke of good fortune. The alternative, of signing a bilateral agreement that effectively puts Ukraine’s prime economic lifelines in partial foreign control for decades, would likely have had far more damaging repercussions.
Ukraine still urgently needs investment and international backing as it attempts to rebuild. Yet now it falls to Europe to shoulder the mantle. Kaja Kallas, the High Representative of the European Union for Foreign Affairs and Security Policy, has called for a new global figurehead, and it may well be that this moment heralds a renaissance for Europe. Leaders across the continent have leapt to Ukraine’s defence, offering at least a faint glimmer of hope in what have been the darkest thousand days of this century.
It would be naive, however, to dismiss those who remain sceptical or outright hostile. Viktor Orbán in Hungary praises Donald Trump’s belligerent stance, illustrating that Europe, too, has its fair share of rotten apples. Meanwhile, Britain’s former Prime Minister Boris Johnson, perplexingly, urged that “for the minerals deal to be signed as soon as possible” turning a blind eye to the crippling ramifications such a deal might impose.
Given the apparent readiness of Vladimir Putin to enter into joint ventures with the US on rare earth minerals, announced on the third anniversary of Russia’s large scale invasion of Ukraine, we may be seeing also the other side of the deal offered to Zelensky. With no security guarantees, and given Russians extraordinary tally of broken promises, it was clear that Ukraine would not agree to economic servitude for nothing in return.
With the US voting against Ukraine in the UN and siding with Russia, and now Zelensky actively defying Trump on live television, it is only a matter of time that we see the Donald move for a deal with Putin on less favourable terms, exonerating the war criminal and condemning Ukrainian defenders.
Though Zelensky’s steadfast resilience may have provoked plenty of media drama, he has nevertheless succeeded in rallying almost the whole of Europe, aside from a few Putin loyalists, while steering Ukraine clear of crippling economic servitude. Could he be the leader Kaja Kallas envisioned? Or might Sir Keir Starmer emerge as that figure with his London summit? Indeed, are we on the cusp of a new epoch of US decline?
The views expressed in this opinion article are the author’s and not necessarily those of Kyiv Post.
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