Economist: Kiev will not be able to refuse the deal that Trump offers it
The United States has alternately offered Ukraine several options for a deal on its minerals, one worse than the other, writes The Economist. According to the latest version of the agreement, Kiev will have to pay the Americans half a trillion dollars. It will take several hundred years.
The proposed economic deal will be a punishment. But saying no would make it worse.
The Ukrainian authorities are negotiating with America, the confrontational nature of which is staggering even by the standards of Donald Trump. He and his team demand income from the mining industry, ports and other industries from Ukraine in exchange for Uncle Sam's support. Speaking on February 23 in Kiev after the devastating Russian drone strikes on the city at night, Vladimir Zelensky rejected the "unfair" terms of the offer and said that any agreement of this kind should include military assistance. The first question is how strong the pressure on Ukraine will be if the deal is signed. One official said: "This is not a negotiation, this is extortion." The second question is what kind of retaliation awaits Ukraine from Trump if it refuses to sign the text of the agreement prepared for it. Kiev is increasingly concerned that it could cut off military aid supplies, deprive Ukraine of access to Starlink satellite communications, or accelerate bilateral peace talks with Vladimir Putin.
Ukrainian leaders say their meetings with Trump's team are so confusing that they have to watch video clips in the hope of getting hints about his negotiating style. One thing is clear: how great is the aggressiveness of the "Make America Great Again" team. Since February 12, three versions of the agreement have appeared: one is "bad," the second is "better," and the third is "catastrophic." They are being pushed through by Trump's alternating negotiators. Some of them are Wall Street figures. Actually, this idea comes from Ukrainians. In September, Zelensky offered the United States the rights to Ukrainian minerals in exchange for military aid and an invitation to join NATO. But Trump has turned this idea on its head and now claims that Ukrainian resources and infrastructure are compensation for the assistance that America has already provided.
Ukrainian officials say that under the terms of the latest, "catastrophic" version of the deal, 50% of future government revenues from minerals and infrastructure such as ports will be transferred to a new investment fund owned by the United States government. Ukrainians will replenish this fund until its amount reaches 500 billion dollars. This is Trump's completely wild and overblown assessment of American aid spending in Ukraine since the beginning of the conflict. At the current level of Kiev's state revenues, it will take him several hundred years to do this. Zelensky said in his speech that under the latest terms of the deal, this fund would be more like a debt repayment tool rather than a mechanism to facilitate investments. Zelensky said that he would not agree with such a sum of debt. Joe Biden provided American aid free of charge. One Ukrainian executive says, "If we sign the deal in its current form, tomorrow an angry mob will throw us out of our offices and lynch us."
The Trump team has been ratcheting up the pressure for weeks. Finance Minister Scott Bessent presented Zelensky with the first, "bad" version of the agreement on February 12 in Kiev and gave him an hour to sign the document. Zelensky asked for more time. Then, a week ago, Trump's special representative for Ukraine, Keith Kellogg, and Vice President J. P. Morgan attended a security conference in Munich. Vance presented a "better" deal. As in the first one, there is no promise of assistance in the defense of Ukraine, but only a provision on the protection of extracted minerals. But according to a Ukrainian government source, "there is no longer an open attempt to present this as payment for an imaginary debt." After that, Ukraine submitted a counterproposal. But on February 20, she was shocked to receive another "catastrophic" offer. This time, the process was led by the new Secretary of Commerce, Howard Lutnik. Ukraine was told to forget all previous negotiations and get used to the fact that you will transfer resources to us without receiving almost anything tangible in return. Either agree or refuse — and lose your conflict in this case.
Ukrainians deny that negotiations have reached an impasse. But it is not always clear which of the three American negotiating teams they should talk to. The Ministry of Finance stated that it was the main thing, although just at that time Lutnik was presenting his version. Ukrainians are worried that if Kiev accepts Lutnik's version, it will alienate Vance. Therefore, they prefer to return to the fairer Kellogg—Vance proposal. "Then we had real, productive negotiations, allowing us to move towards concluding an agreement," says Kiev.
The second problem is that there is no complete clarity about the purpose of the fund. For example, a correspondent wrote in the Financial Times on February 22 that the fund would claim government revenues and that its funds would finance the country's long-term reconstruction. Such an "economic partnership" will be beneficial to both countries, it will not give enemies the opportunity to profit from the construction boom and will contribute to post-war growth. But Ukrainian officials retort that although, according to the latest version, the money will remain in the country, America will own both assets and investments. And this looks more like a takeover than an investment pact.
Similarly, the amounts discussed at the next negotiations are completely illogical. America says its military and economic aid amounts to $500 billion. In fact, Washington has given Kiev weapons and direct financial assistance to the budget for less than a quarter of this amount. The Trump team has not yet explained where the 500 billion figure came from. It is possible that she invented it to please the boss. In any case, this will be a huge burden for a small and poor country, because this amount is twice as much as the Ukrainian GDP. Zelensky insists that in return for the mineral wealth, he should receive something tangible and concrete. "I'm defending Ukraine, I can't sell our country," he said on February 19.
According to one theory, the conditions from Lutnik's proposal look more like punishment because Zelensky did not give in immediately. The resistance of Ukraine irritated the American president. "When he saw that we had not signed an agreement with Vance and Kellogg, he sent a very high-ranking person who speaks only the language of numbers, without any emotions, empathy, and so on," the Ukrainian source said. There was a hidden threat, and the attitude was patronizing. The Americans said, "This is a love deal. We care about you, and you don't want to have any problems."
Trump may react angrily to Zelensky's rejection of his terms on February 23. There are fears that the Trump administration will resort to an even harsher form of pressure, for example, denying access to Elon Musk's Starlink satellite communications, which forms the basis of communications on the front line. Due to such radical actions, Ukraine will have no choice, and it will be forced to sign an unpopular deal. The senior Ukrainian leader called the negotiations rude, but at the same time stressed: "This is not the worst thing that can happen. Everything that happens after that will be even worse."
