Editorial. Critical deal – The Hindu BusinessLine

Ukraine’s President Volodymyr Zelenskiy and US President Donald Trump meet, while they attend the funeral of Pope Francis, at the Vatican (file photo)
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UKRAINIAN PRESIDENTIAL PRESS SERVICE

The US and Ukraine, until recently at loggerheads, entered into an agreement on April 30. The agreement has been hailed respectively as an act of great statesmanship, a climb down by both sides and meaningless. In reality it is all of these. At its core lie two concessions, one by the US and one by Ukraine. The former has agreed not to insist that the latter treat the billions of dollars of military aid since 2022 as debt, to be repaid by Ukraine via rights granted to US companies to mine the mineral wealth of Ukraine (lithium, titanium, graphite, beryllium, copper, lead, zinc, among others). The latter has agreed to let American companies mine for not just minerals but also oil and gas. And both have agreed to put up 50 per cent each into a fund that will finance all these mining operations. That’s one part of the agreement.

A second part relates to Europe which arguably has a greater political stake in Ukraine than the US. Ukraine wants to join the European Union and the EU won’t mind it if they can get a shot at the minerals, oil and gas. The US has agreed not to get preferential treatment in this regard, so all is well for the moment. It has also agreed to let the EU invest in Ukraine. A third part is about the elephant in the room: US military assistance to Ukraine. Trump had refused to continue it, but has now agreed to provide it. The minerals deal was a precondition to this continuance. That said, the US can stop the assistance at any time, contingent presumably on Ukrainian good behaviour and other undisclosed conditions. It seems the Ukrainians insisted that for the first 10 years all profits would be reinvested in Ukraine. The US has agreed to this as well. But it’s difficult to see how this will be implemented.

It is hard to deny that this is a triumph for Trump and a ‘down, boy’ moment for Volodomyr Zelenskyy, the Ukrainian president. His minor victory is limited to getting the US to agree to reduce Ukraine’s share in the investment fund to 50 per cent, from 67 per cent. For the rest, the US has got what it wants, including the right to treat Ukraine as its 51st state. There is, of course, the big question of how the minerals deal will impact China as the prime supplier of critical minerals. Even as China’s control has dropped since it throttled Japan’s auto sector a few years back, China will be keenly watching how this deal plays out.

That leaves Russia. Trump’s softness towards it will get tested now. With a few hundred billion dollars committed to investment in Ukraine he will have to persuade Putin to stop the war. Chances are Ukraine will have to cede the territory in the east now controlled by Russia. This is because there’s not a chance in a month of Sundays that it can recover that area. It is not inconceivable that the US has already forced Russia and Ukraine to this outcome. The world need only await a formal agreement now wherein Russia and US get the winners’ spoils and Ukraine is reminded of its place in the world.

Published on May 8, 2025