If Ukraine agrees to Trump’s minerals deal, it will be a mafia-style extortion

Threatened with his country’s annihilation, Volodymyr Zelensky has been forced into a protection racket – one in which Vladimir Putin supplies the muscle and, like a street-level mafia thug, the US president collects the rent, says world affairs editor Sam Kiley

By agreeing to a minerals deal with Donald Trump, Ukraine’s president sent the Russian rouble to its highest level against the dollar since last summer.

Currency traders clearly believe Trump’s apparent approval of a trade agreement to rinse Ukraine for billions in back-payment for military and financial aid suits the Kremlin, not Kyiv.

Threatened with annihilation, Ukraine has been forced into a protection racket, one in which Vladimir Putin has supplied the muscle, and Trump, like a street-level mafia thug, has stepped in to collect the rent.

“The Russian currency has gained about 24 per cent against the dollar and 15 per cent against [the Chinese] yuan this year, mostly on expectations of better relations with the United States. Russia’s stock market index rose to the highest level since May 2024,” Reuters reported on Wednesday.

Details of the deal – which Trump and Volodymyr Zelensky are expected to sign in Washington later this week – are limited. Key, from Ukraine’s perspective, is that Kyiv has not been able to trade significant security guarantees for US access to its rare earth minerals.

In Kyiv, officials said only that it was likely the US and Ukraine would set up a joint investment fund, and that 50 per cent of profits from Ukrainian mineral extraction would go into the financial vehicle, up to half a trillion dollars.

The US would be committed to a “stable and economically prosperous Ukraine”. Ukraine’s prime minister, Denys Shmyhal, said that the “US supports Ukraine’s efforts to obtain security guarantees to build a lasting peace”.

But this isn’t a successful outcome for Ukraine. Saying that the US won’t stand in the way of Ukraine seeking opportunities to defend itself is not an American undertaking to help.

Trump has said only that Ukraine would get “lots of military equipment … And the right to fight on”.

This may be the best that Ukraine can hope for, given that the new US administration has set improving economic relations with Russia as a priority, has undermined Ukraine in talks with Russia by taking the Kremlin’s side, and is also backing away from funding the security of Europe in Nato.

Ukraine’s minerals are estimated to be worth about $12 trillion (£9.5 trillion). The country’s parliament will have to ratify any deal and officials said that the broad outline had been agreed but that details were still to be negotiated.

Zelensky hopes that Trump will have some financial skin in the game in the defence of Ukraine. But by not offering security, and with Trump making only a vague commitment to allow weapons supplies to continue to Kyiv until Russia signs a peace agreement, much is still up in the air.

So far, Trump has ruled out Ukrainian participation in talks about Ukraine with Russia – just as he has also excluded Europe.

European nations in Nato – notably, this week, the UK – are now rushing to figure out how to increase their own defence spending to make up for a promised reduction in American commitments to European security.

Europe and the UK have outspent the US on Ukraine’s defence. According to the Kiel Institute, the US has spent close to €120bn (£99bn) on Ukraine, compared to nearly €130bn by the EU and UK.

As a proportion of GDP, based on statistics from December last year, the institute said the US, UK and Germany were spending less than 0.2 per cent of their GDP on Ukraine – and many Ukrainian allies were chipping in with less than 0.1 per cent.

Trump claims the US has spent $350bn on Ukraine. This is a lie – but he wants it back, so he’s demanding about three times the “cost” of US support for defending democracy. Another mafia move.

Zelensky may sign the rare earth minerals deal. It may even manage to get through ratification by Ukraine’s parliament. But this process will undermine Zelensky, who Trump has declared a “dictator”.

But Ukraine’s president will have bought valuable time while Trump charges ahead with doing a deal that is likely to represent a long-term threat to Ukraine’s sovereignty.