After a dramatic Oval Office showdown between President Donald Trump and Volodymyr Zelenskyy in late February that almost jeopardised US-Ukraine diplomatic relations, the two sides on Wednesday finally inked an "economic partnership agreement" in Washington, DC.
US Treasury Secretary Scott Bessent, who announced the agreement, said the newly created US-Ukraine Reconstruction Investment Fund signals to Russia about Trump's commitment to a peace process that ensures a "free, sovereign and prosperous Ukraine over the long term".
Bessent confirms the US and Ukraine have agreed to a new economic partnership, or as Trump calls it, the “rare-earth deal”.
— Clandestine (@WarClandestine) April 30, 2025
This will allow the US to recoup war funding, via Ukraine’s minerals, natural resources, etc.
One step closer to peace!
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He clarified that countries and individuals who supported Russia's war efforts will not be allowed to benefit from the reconstruction of Ukraine.
How the deal will affect Ukraine's EU membership bid?
Ukrainian Prime Minister Denys Shmyhal said his country would still have "full control over subsoil, infrastructure, and natural resources" as per the deal. He also clarified that the deal will not affect Kyiv's bid to become part of the European Union. Ukraine will also not have any debt obligations to the US, something that the war-torn nation has been trying to negotiate for months.
Ukrainian Minister of Economy Yulia Svyrydenko said, "We are gaining not only investment, but also a strategic partner committed to working with us to drive economic growth and innovation."
Ukrainian economic ministry said Washington would contribute directly to the fund or via military aid while Kyiv would put in 50 per cent of the revenues generated from the natural resources. The fund will be used solely for the benefit of Ukraine in the first 10 years. After this period, the "profits may be distributed between the partners".
Interestingly, both the US and Ukraine would have equal decision-making powers regarding the fund. However, the deal would only cover the future military assistance from the US.
"This agreement is the outcome of extensive negotiations, and I am grateful to both negotiating teams for their professionalism and dedication. Together, we have developed a mutually beneficial framework," Svyrydenko added.
Impact on war with Russia
With Trump promising more assistance to Ukraine, experts feel that Russian President Vladimir Putin will stop further aggression while keeping current territorial gains intact, including Crimea and four other eastern provinces of Ukraine. However, Zelenskyy is unlikely to easily agree on this as he has often maintained that the move would be unconstitutional. The US had earlier softened its policy towards Russia in a bid to push Putin to agree to a truce.
