Trump's billion-dollar bargain: how the US pressured Ukraine and why the deal collapsed

At the end of last week, Munich became the stage where the world order is being shaped.

It wasn’t just because of Vice President JD Vance’s speech, in which he declared an end to the era of shared US-European values and openly backed far-right forces in European politics.

As shocked European leaders scrambled to respond to this new reality, the US turned its attention to pressuring Ukraine. The White House demanded that Ukraine immediately agree to their version of a mineral resources deal in exchange for aid – otherwise, they threatened, a meeting with Vance would not go ahead. But the pressure stopped after Kyiv refused, and the meeting took place anyway.

Washington had assumed that, faced with a security deficit and under the pressure of the peace talks Trump plans to hold with Russia, Ukraine would agree to any terms. But that did not happen. Zelenskyy said no.

What followed was completely unexpected for Ukraine.

The US showed that it could instantly switch from maximum pressure to business as usual, as if nothing had happened.

This was the first piece of good news for Ukraine regarding the peace talks: JD Vance has aligned with the position Ukraine has been advocating.

Moreover, Ukraine could benefit from the growing tensions between the US and Europe. For European leaders, the Munich conference served as a wake-up call, even for those countries that had previously preferred to ignore the looming threats. This signals a greater willingness to support Ukraine.

Ukraine expects to receive good news from Europe in the coming days and weeks.

"We arrived in Munich feeling pessimistic. But after the conference, our optimism has definitely grown," one member of the Ukrainian delegation admitted.

Blackmail for peace

Friday evening was when the first US media reports surfaced of a rift between Zelenskyy and the Trump administration, with sources claiming that Ukraine was refusing to sign a resource-sharing agreement.

At first, this sounded absurd. Kyiv had only seen the draft agreement two days earlier. Finalising a strategic intergovernmental deal with major economic implications in just 48 hours was impossible. Ukraine had never planned to sign the document so soon. The negotiations had only just begun. So how could there be talk of a "refusal"?

For Trump’s team, though, the word "impossible" doesn’t exist. Ukraine learned this firsthand in Munich.

A meeting between JD Vance and Zelenskyy was due to take place on Friday morning in the Commerzbank building designated for the American delegation. Everything was ready. Vance had arrived, Ukrainian officials were filtering in, security had even started letting in Ukrainian journalists. Then suddenly everyone was told that the meeting was postponed indefinitely.

Many assumed the delay was due to the absence of Secretary of State Marco Rubio, who had been held up by technical problems during his flight.

But in reality, a high-stakes drama was unfolding between Ukraine and the US.

European Pravda has reconstructed the events based on Ukrainian and American sources.

Initially Kyiv did not take Washington’s insistence on signing the agreement in Munich seriously. The document needed work. After all, in international relations, no one signs the first draft of a strategic agreement.

But in Munich the US issued an ultimatum: if Ukraine wanted a meeting with Vance to discuss the framework for peace, it had to sign the deal. Immediately.

After some back-and-forth, the Americans agreed to push the meeting to the evening and gave Ukraine seven hours to finalise amendments. It quickly became clear that the US had no real intention of revising the document. When Ukraine submitted its revised version, the Americans responded by rejecting all the key Ukrainian amendments.

Zelenskyy had to either sign what Washington had drafted or forget about meeting Vance. The meeting was only possible "as part of a package", with the signing of the deal.

With Trump already showing a willingness to negotiate with Putin without consulting Ukraine, this pressure could only be seen as part of a broader peace deal strategy.

But Zelenskyy held firm and refused to sign the document on the White House’s terms.

What happened next was even more unexpected.

The harshness and pressure from US negotiators vanished as if by magic. The demand to sign the agreement was quietly dropped, and the meeting with Vance went ahead as if nothing had happened. In fact, it turned out to be quite successful.

This is how Ukraine got its first real insight into the negotiating style of the new US administration.

Uncle Sam’s resources

European Pravda does not have the full text of the agreement proposed by the US, but we do know its general outline.

The deal was structured as a memorandum that would split profits from Ukraine’s natural resources 50/50 – half for the Ukrainian government (with the understanding that if Kyiv wanted to share with Europeans, that would come out of its own share) and the other half for the US.

Crucially, the beneficiaries on the American side would not be the US government but private investors. The specific companies involved were not determined at this stage. Instead, the US proposed setting up a trust fund to which Ukraine would transfer the rights to develop its resources. This fund would then select the American companies who would extract – and profit from – Ukraine’s minerals.

Although US President Donald Trump has publicly stated that the deal was focused on rare earth metals (many of which are located in Russian-occupied territories), the proposed agreement was far broader, covering lithium, oil, gas, and other key resources as well.

The draft provided little clarity on how the deal would work with regard to resources in occupied areas. Washington showed no sign of being willing to fight for them.

What would Ukraine get in return? Almost nothing.

The agreement contained no security guarantees – the key reason why Zelenskyy ultimately refused to sign it.

"We can talk about profit-sharing when the security guarantees are clear. I didn’t see them in this document," he later explained.

The US, however, saw things differently.

Their argument was that major American investments in Ukraine would serve as a security guarantee by default, as they would create incentives for Washington to defend Ukraine. The White House also claimed that US involvement would allow Ukraine to begin exploiting deposits it currently lacks the technical capacity to develop.

There is some truth to this. But there are also scenarios in which Ukraine would lose control over its resources without gaining any security benefits.

For instance, if American companies focused only on deposits in western Ukraine without making any investments in strengthening the Ukrainian military, the only real impact of the deal would be to cut Ukraine’s future resource revenues by 50%.

There is an even bigger problem, which we’ll come to shortly.

The future of the natural resources deal

All the Ukrainian sources emphasised that Ukraine is not rejecting the deal outright and remains interested in further negotiations. Despite its flaws, the attraction of large-scale American investment could serve as a complementary security guarantee.

Zelenskyy and Vance have officially agreed to have legal teams from both governments work on revising the document.

Notably, the current draft does not appear to have been prepared by the US Department of Energy or the State Department but by Trump’s private legal team, which seemingly failed to distinguish between intergovernmental agreements and commercial contracts.

For instance, the US side wants the agreement to include binding obligations on Ukraine. This, however, would require ratification by the Ukrainian parliament. Is Ukraine’s parliament likely to approve a deal that would involve Ukraine surrendering a significant portion of its resources to a complex profit-sharing scheme with private American companies?

The answer is almost certainly no.

At least not without strong US government commitments on security to outweigh the deal’s drawbacks.

Another major issue is the staggering price tag Trump has publicly attached to the deal – $500 billion to $1 trillion.

The Ukrainian side has no idea where these numbers came from. US officials came up with them, not Kyiv. The US reportedly consulted at least one Ukrainian investment management fund, but there is no recent assessment of the country’s resource capacity. In some cases only outdated Soviet-era data is available, and it may be wildly inaccurate.

Another mystery is Trump’s true objective.

Does he simply want a PR victory, announcing a "$500 billion deal" to impress American voters?

Or is this a real attempt to extract money from Ukraine? If so, after signing the agreement, Ukraine would face even greater pressure from Washington demanding the "promised" funds.

Another political risk is that Trump, who favours quick wins, might expect the cash to start flowing within the next few years, which would require profits to be channelled to the private companies. In that case, the US president is in for a rude awakening, because these are long-term investments.

Finally, there is one fundamental issue that calls the entire deal into question.

The US publicly declared in Munich that revenues from the agreement should be used to "pay the US back" for the aid it has given Ukraine in recent years, citing figures that bore little resemblance to what Ukraine actually received.

This demand is completely absurd.

If the US insists on this condition, it could render the agreement completely unworkable.

To retroactively demand repayment for aid that was given as non-refundable support, and frequently included weapons Ukraine had not requested but was forced to accept, is a violation of the core principles of international relations.

It also opens up a Pandora’s box, as the EU has provided even more aid to Ukraine than the US.

Would it be politically possible for Washington to recoup its costs while also gaining control over Ukrainian resources, while the EU, which Ukraine plans to join, gets nothing?

The question is a rhetorical one.

There is good reason to suspect that Washington never actually expected this repayment demand to fly. The deal was structured to benefit private American businesses. How would they be responsible for reimbursing costs incurred by the US government?

Most likely this was a bargaining chip, not a firm demand.

The real uncertainty is whether Washington still wants this deal after Ukraine refused to sign the "Trump version".

On Saturday, US media outlets widely reported that "Zelenskyy had rejected the deal", surprising even some members of the Ukrainian delegation, who saw the situation as a renegotiation, not a refusal. By Sunday, Washington had issued an official statement criticising Zelenskyy’s "short-sighted decision".

Only time will tell if the US remains interested in further talks.

For now, though, it seems that the business wing of Trump’s administration was attempting to exploit Ukraine’s vulnerability to force it into an unfavourable deal.

When it became clear that Kyiv wouldn’t cave, they backed off.

"Peace agreements": a win for Ukraine

The resource deal negotiations may have ended in failure, but the peace talks in Munich delivered more than anyone expected.

Before arriving in Munich, Zelenskyy’s team had low expectations. There had already been too many setbacks: Trump’s call with Putin, which Ukraine only learned about from the news; and the missteps by new US Defense Secretary Pete Hegseth, who conceded key US positions on NATO and troop deployment even before formal negotiations began.

Trump’s administration had displayed a lack of understanding of the fundamentals. Zelenskyy’s main task in his talks with Vice President JD Vance was to explain Ukraine’s red lines, particularly the fact that a frozen conflict without real security guarantees is unacceptable, because Putin would use any pause to regroup and then attack again.

This is why Ukraine never calls for a "ceasefire". Instead, it insists on a "just, sustainable and lasting peace".

The Zelenskyy-Vance meeting took an unexpected turn from the very first minutes.

Vance himself outlined a position identical to Ukraine’s: "We want the killing to stop, but we want to achieve a durable, lasting peace, not the kind of peace that’s going to have Eastern Europe in conflict just a couple of years down the road."

Why did the US align with Ukraine’s view?

In reality, a lasting peace in Ukraine is just as crucial for the White House as it is for Zelenskyy. Hopefully Washington has finally grasped this reality.

It’s worth emphasising that neither Trump nor Vance care about Ukraine’s fate – that much is clear after the failed natural resources deal. But Trump has no interest in Russia launching another invasion during his presidency. This would be his peace deal, and he could no longer blame Biden or Obama for its failure.

Vance, on the other hand, is even more invested in ensuring stability, because he is personally negotiating these deals. It’s an open secret that Vance wants to be the next US president.

Despite this progress, securing a ceasefire remains the top US priority. The word "victory" has now vanished from American officials’ vocabulary. This means a difficult negotiation process lies ahead – one in which Ukraine will need to do a lot of explaining to its US partners.

Meanwhile, another process is unfolding which is of great benefit to Ukraine.

Europe is deeply alarmed about being sidelined from the Russia-US peace talks, and about the fracturing of its partnership with Washington, especially after Vance’s controversial Munich speech.

The depth of the crisis is now clear to everyone.

In response, an emergency summit took place in Paris on Monday, without Hungary or Slovakia, but with the UK present.

This gathering will effectively be a "Coalition of Resolute States" – those committed to real support for Ukraine.

"It feels like Europe has finally woken up. Now we’re waiting for unity and decisive action," one Ukrainian diplomat said of the Munich conference’s outcome.

The coming days will determine whether this newfound European resolve translates into concrete action.

Sergiy Sydorenko

Editor, European Pravda, from Munich

Translated by Daria Meshcheriakova

Edited by Teresa Pearce