Amoral art of deal-making: US-Ukraine pact opens new geopolitical paradigm

The deal on minerals between Ukraine and the United States (US) underlines a notable shift in the latter’s position as the superpower guarantor of global democracy and peace to a transactional power. At one level, the controversial deal is a face-saving option for both countries after a disastrously ill-tempered meeting in March played out in public between Ukrainian President Volodymyr Zelenskyy and US President Donald Trump. The upsides to this agreement, however, must be set against its uncertainties. In the immediate term, Ukraine’s gains are important.  The deal, which is subject to ratification by the Ukrainian Rada, signals to Russia that the US is invested in a free Ukraine for the long term. At a time when Mr Trump is looking to reduce global-security commitments, including commitments to the North Atlantic Treaty Organization (Nato), a strategic economic agreement with Ukraine’s single-largest contributor to military and other aid — collectively, Nato provides more — is a good outcome in a range of limited options. 

To be implemented via an equal-partnership fund — the Reconstruction Investment Fund — operating on a profit-sharing basis, the agreement does not require Ukraine to repay the US for past military aid. The East European nation retains sovereignty over its natural resources. All profits generated will be reinvested in Ukraine for the first 10 years. The agreement also appears to indicate a u-turn from Mr Trump’s earlier apparent support for his personal friend Russian President Vladimir Putin, with whom the US was discussing a similar mineral-sharing deal in Ukraine’s Russian-occupied Donbass region.

  But the key question that arises from this deal is an ethical one. It undoubtedly reduces the US’ geopolitical standing and principles to deal-making. In the amoral world of geoeconomics, the agreement suggests that the US is prepared to deal with any country on the basis of hard-nosed reciprocity. The other question is whether it will meaningfully outline a path to ending the war, which was the starting point of the Trump-Zelenskyy negotiations. It is worth noting that the agreement does not include US security guarantees. Instead, Mr Zelenskyy appears to be relying on $30 billion from the US — a $15 billion military-aid package for 2025 and a further $15 billion for 2026. But the deal does not address the fundamental cause of the war: Mr Putin’s territorial aspirations and Russia’s occupation of Crimea, issues that are non-negotiable in both Moscow and Kyiv. Nor does it preclude Ukraine joining the European Union, an issue that had amplified Mr Putin’s belligerence.

  Meanwhile, revenue from the deal is unlikely to materialise for at least a decade, mainly because most critical mineral deposits are located in the war-ravaged east. Instead, it’s the symbolic value of the agreement that counts. It could escalate tensions between the US and China, which has been increasingly bankrolling Russia’s war economy, which is struggling against US-imposed sanctions. Access to critical minerals, however distant the prospect, is being interpreted as an attempt to counter China’s global near-monopoly of these resources, which Beijing emphasised by restricting US access in an early salvo in the trade war. In that sense, the deal could signal the opening of a proxy frontier in the new Cold War.