The United States and Ukraine have entered into a historic arrangement. This agreement is meant to bolster Ukraine’s defense capabilities while attracting international investment in its mineral resources. Ukraine’s First Deputy Prime Minister Yulia Svyrydenko signed the agreement. It establishes the intention of a collaborative framework for sharing profits and royalties on future export of Ukrainian minerals and rare earths. This part of the initiative would help improve Ukraine’s economic prospects. It hopes to rally Congress behind the measure during continued standoffs with Russia — with the Trump administration.
According to published reports, fierce negotiations heated over the several months over the agreement. Yet just hours before the signing, it almost fell apart. The agreement’s most significant aspect is perhaps its proposal to establish a US-Ukraine Reconstruction Investment Fund. This fund will be split evenly between the two countries, providing for equal voting power among both countries. The fund aims to attract significant international investment into Ukraine. More importantly, it will make all income and gifts remain untaxed in both the US and Ukraine.
U.S. Treasury Secretary Scott Bessent emphasized that Ukraine will retain “full control over its mineral resources, infrastructure, and natural resources.” Ukraine’s Prime Minister Denys Shmyhal was an enthusiastic proponent of this approach. He called the deal equitable, adding that it allows Ukraine to keep ownership over its rich natural resources.
“It is the Ukrainian state that determines where and what to extract,” – Yulia Svyrydenko
The deal is particularly noteworthy for not placing any debt obligations on Ukraine. Further, it leaves the controversial ownership structure of other SOEs such as Ukrnafta and Energoatom in place. This element was highly influential to the adoption of the agreement. That was huge given that in the lead-up to the negotiations, the US had proposed allowing them to retain control over 100% of the fund’s generated revenues. Unfortunately, such provisions were not to be included in the final behalf … literally.
Bessent highlighted the broader implications of this partnership, stating, “This agreement signals clearly to Russia that the [Trump administration] is committed to a peace process centered on a free, sovereign, and prosperous Ukraine over the long term.” He very clearly articulated President Trump’s vision for that partnership. It is a testament to the unwavering commitment both the American and Ukrainian peoples have to realizing a future of peace and prosperity for Ukrainians.
The US-Ukraine Reconstruction Investment Fund authorized here would be essential to repaying the estimated $175 billion in aid. This aid has helped Ukraine from the moment the first shots of the war were fired.
“They will continue to belong to Ukraine,” – Yulia Svyrydenko
This agreement is poised to be a tremendous shot in the arm to Ukraine’s own economy. It will increase opportunities for foreign direct investment and help to build resiliency against Russian aggression. As the war rages, the need for Ukraine to assert ownership over its resources and infrastructure through transparency has never been greater. Simultaneously, Ukraine needs to continue seeking international partnerships to push recovery and growth forward.
As negotiations reached their crescendo, it became clear to both sides that they needed a strong bilateral deal to emerge victorious. While they worked to support Ukraine’s interests during the whole process. This partnership will help to facilitate closer defense, political, and economic cooperation between Ukraine and the United States. Both countries are expected to zero in on deepening ties in strategic areas such as defense and energy.
The agreement is a big win. Yet, it still awaits approval from Ukraine’s parliament to be completely enacted.