Posted originally on May 2, 2025 by Martin Armstrong 

The minerals deal was enough to entice President Donald Trump to cave, siding with Kiev and permitting the first US sale of military equipment to Ukraine since taking office. Trump has been extremely critical of Zelensky since the war began, consistently warning Zelensky that he has blood on his hands and must end the war.

Congress approved a $50 million defense package to Ukraine through direct commercial sales (DCS). Trump is a businessman first and foremost—the mineral deal had to be approved before he would approve of any aid package. The United States now has preferential rights to extract minerals from Ukraine. This will provide the US with rare earth elements that are essential for technology and defense at a time when China is withholding sales.

Ukraine retains full ownership over its subsoil and natural resources. Any extraction must be approved by Kyiv. The deal will establish a joint Reconstruction Investment Fund—50% of revenue from licenses for Ukrainian minerals and oil will go into this fund that is intended to aid Ukraine. “Together with the United States, we will create a fund that will attract Western investments to our country,” Ukraine’s Economy Minister Yulia Svyrydenko said. “We will manage this fund jointly with the United States. Neither party will have a majority vote, reflecting an equal partnership between Ukraine and the United States.”

Svyrydenko believes that the US will entice others to invest into the fund, which is supported by the US International Finance Cooperation (DFC). “DFC will help us attract investments and technologies from funds and companies in both the US and the EU and other countries that support our fight against the Russian enemy,” Svyrydenko said. She also noted that the first decade of profits and revenues will only be invested in Ukraine.

“In recognition of the significant financial and material support that the people of the United States have provided to the defense of Ukraine since Russia’s full-scale invasion, this economic partnership positions our two countries to work collaboratively and invest together to ensure that our mutual assets, talents, and capabilities can accelerate Ukraine’s economic recovery,” the US Treasury Department stated.

While the Kremlin has not officially commented at the time of this writing, there are statements coming from Moscow condemning this deal. Dmitry Medvedev, Deputy Chairman of Russia’s Security Council, believes Trump is taking advantage of Ukraine by strategically asking it to “pay for U.S. aid with mineral resources.” He declared that “Ukraine is a vanishing country” and believes the US is simply profiting off of a broken nation. Sergei Markov stated that prolonging military spending will only prolong the war and deter any diplomatic efforts.

China controls 75% of the world’s rare earth minerals, and the US has been desperate to secure new reserves in the wake of the trade war. Ukraine’s mineral deposits have been largely untouched up until now. There were strategic reasons for the US to sign this deal, but it remains to be seen whether this move will lead to further involvement in this perpetual proxy war.