“Panic In Kyiv” Over Trump’s Leaked “Economic Colonization Deal” Worse Than Done To Germany At Versailles

Donald Trump’s demand for a $500bn (£400bn) “payback” from Ukraine goes far beyond US control over the country’s critical minerals. It covers everything from ports and infrastructure to oil and gas, and the larger resource base of the country.

The terms of the contract that landed at Volodymyr Zelensky’s office a week ago amount to the US economic colonisation of Ukraine, in legal perpetuity. It implies a burden of reparations that cannot possibly be achieved. The document has caused consternation and panic in Kyiv.

The Telegraph has obtained a draft of the pre-decisional contract, marked “Privileged & Confidential’ and dated Feb 7 2025. It states that the US and Ukraine should form a joint investment fund to ensure that “hostile parties to the conflict do not benefit from the reconstruction of Ukraine”.

The agreement covers the “economic value associated with resources of Ukraine”, including “mineral resources, oil and gas resources, ports, other infrastructure (as agreed)”, leaving it unclear what else might be encompassed. “This agreement shall be governed by New York law, without regard to conflict of laws principles,” it states.

How this is going to be governed by New York law is beyond me. But I do expect legal scholars to be hopping on this like a swarm of june bugs. This is screaming “illegality” at the top of its lungs. And the article goes on to pretty much state that.

It states that “for all future licences, the US will have a right of first refusal for the purchase of exportable minerals”. Washington will have sovereign immunity and acquire near total control over most of Ukraine’s commodity and resource economy. The fund “shall have the exclusive right to establish the method, selection criteria, terms, and conditions” of all future licences and projects. And so forth, in this vein. It seems to have been written by private lawyers, not the US departments of state or commerce.

That is putting it mildly. Now Zelensky himself had mentioned a stake in minerals in Ukraine to Trump, in the hopes of future arms deliveries. But this goes way beyond that. And better that titanium, tungsten, uranium, graphite and rare earth minerals fall into American hands rather than Russian hands. The problem is that nowadays those are the same pair of hands.

He [Zelensky] probably did not expect to be confronted with terms normally imposed on aggressor states defeated in war. They are worse than the financial penalties imposed on Germany and Japan after their defeat in 1945. Both countries were ultimately net recipients of funds from the victorious allies.

If this draft were accepted, Trump’s demands would amount to a higher share of Ukrainian GDP than reparations imposed on Germany at the Versailles Treaty, later whittled down at the London Conference in 1921, and by the Dawes Plan in 1924. At the same time, he seems willing to let Russia off the hook entirely.

Donald Trump told Fox News that Ukraine had “essentially agreed” to hand over $500bn. “They have tremendously valuable land in terms of rare earths, in terms of oil and gas, in terms of other things,” he said.

He warned that Ukraine would be handed to Putin on a plate if it rejected the terms. “They may make a deal. They may not make a deal. They may be Russian someday, or they may not be Russian someday. But I want this money back,” he said.

Trump said the US had spent $300bn on the war so far, adding that it would be “stupid” to hand over any more. In fact the five packages agreed by Congress total $175bn, of which $70bn was spent in the US on weapons production. Some of it is in the form of humanitarian grants, but much of it is lend-lease money that must be repaid.

That brings us to the actual, not to mention moral reality, that Ukraine cannot possibly meet Trump’s $500 billion repayment demand in any meaningful timeframe. The moral reality is that this country is a victim nation that was invaded and has “held the battle line for the liberal democracies at enormous sacrifice for three years. Who really has a debt to whom, may one ask?”

That’s the question that The Telegraph poses and it is a good one.

In genuine commerce the other side can usually walk away. Trump’s demand is iron-fist coercion by a neo-imperial power against a weaker nation with its back to the wall, and all for a commodity bonanza that exists chiefly in Trump’s head.

“Often-times the best deal you make is the deal you don’t make,” said Trump, offering another of his pearls.

Zelensky does not have that luxury. He has to pick between the military violation of Ukraine by Putin, and the economic violation of Ukraine by his own ally.

That’s exactly the situation. Rock and a hard place doesn’t even begin to cover it. Trump is the last person in the world who should be involved in these kinds of decisions but nevertheless, there he is.

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