Ukraine Minerals Deal
The Art of the Deal
Does anyone remember the Seinfeld episode, where Jerry and George are trying to come up with an idea for a TV pilot to pitch to NBC. George came up with the idea of a man being sentenced to being Jerry’s butler because of a car accident and not having insurance and the ability to pay him back. I thought of this when I first heard Trump was trying to make a minerals deal with Zelenskyy. I can easily picture in my mind Zelenskyy as Trump’s butler.
Some reading the headline are probably thinking, “no more money to Ukraine.” I understand your disdain and desire to completely wash America’s hands of Ukraine altogether. Money being sent to Ukraine for aid in their war has been a money laundering operation that has resulted in the death of millions of Ukrainians and Russians while lining the pockets of corrupt elites, all on the dime of US taxpayers.
I don’t see this deal the same way. I see it as Trump getting America paid back for the money sent to the Ukraine. The Biden Administration would have you believe the US has sent around $174 billion in aid, but Trump is asking for $500 billion from Ukraine through critical raw materials. Trump obviously believes the US has sent Ukraine much more than the Biden Administration claims.
The $500 billion recovered from Ukraine would take a long time to recoup at current production rates but remember that Ukraine has been at war with Russia for the past three years. If Trump brokered an end to the war, production could ramp up very quickly, and we know how persistent Trump can be in getting things done more quicky. Just ask Elon Musk, Trump recently told him he’s not gutting the government fast enough. Trump also feels illegals aren’t being deported fast enough.
The Art of the Deal.
Donald Trump is a businessman. As a businessman he likes to hold leverage in any deal. He never wants to be dependent on anyone or anything. To make a good deal, one has to be able to walk away from that deal. In order to walk away from a deal, one has to have other options.
China currently controls about two-thirds to three-quarters of the rare earth deposits in the world. China processes more on the high end of that figure, three-quarters. Critical raw materials are vital for modern technology. In fact, 98% of gallium comes from China. Gallium is essential for the production of semi-conductors. In recent times, China has actually banned the export of some critical raw materials to the US, making it impossible to produce some technology domestically.
Trump is looking to make America more independent, dependency on other countries was exposed as a major weakness with the closing of the borders during the Covid lockdowns. Americans no longer had access to many vitally important medicines and technologies. Trump wants to onshore essential production, and to do this, the country needs critical raw materials.
The US can produce some of the material needed, but that process needs to ramp up very quickly and the process probably can’t happen quickly enough to avoid a shortfall. To make matters worse, there are some materials that the US will still need to rely on other countries to produce, but they can’t rely on one country for anything if they can help it.
Currently, the US imports 100% of its graphite, 76% of its cobalt, and 50% of its lithium. Its nickel is processed in Canada. Half of the world’s lithium is found in Australia. Trump recently met with leaders of Australia to discuss trade tariffs.
Where does Ukraine come in? Ukraine has 5% of the world’s critical raw materials. Nineteen million tons of graphite (top five in the word), graphite is needed in the production of EV batteries. Ukraine also has deposits of lithium (also needed for EV batteries) and titanium (needed to make airplanes). I mentioned EV batteries, but lithium batteries in general are needed to store energy.
After the Ukraine war is over, it will need to be rebuilt. I believe the US will play a big part in this. After the war, Ukraine will be able to ramp up production again, I believe Trump will play a big part in making this happen as well.
Trump’s deal with Ukraine and other countries not only opens the door to more onshoring of production in America, which makes America safer and creates more jobs, but it gives Trump leverage in making deals with other countries.
Trump is in the middle of negotiating trade deals with countries like Canada, Mexico and China. In order to get the best deals, the US has to have some kind of leverage, it can’t completely rely on other countries as it currently does. Trump needs to have the ability to walk away, otherwise he won’t get the deals he is looking for.
If one country is unwilling to accept his terms, he will make it up through domestic production and trading with other countries. No longer will America be walked on. No longer will America have to accept the terms of a deal without any recourse.
This is the art of the deal, the ability to walk away from a deal is what makes for a good deal. The domestic production of medicine and semi-conductors, as well as the increased domestic production of critical raw materials will go a long way towards the US having the upper hand again. Not the upper hand to exploit other countries, but the upper hand to require fair deals to be made.
Erik I loved this article. Sometimes all articles get too complicated for me especially when it involves the Middle East and politics. Which is all anyone talks about anymore ! But this one was very easy to understand and especially if what you have said is true about what our Prez is doing. Sometimes don’t we all wonder what the man is thinking ! It all makes wonderful sense how Trump is setting up America for a fantastic future.
Our country truly won’t know how to act with fair trade deals! We know the cabal took control of the US industrial revolution at the very beginning, along with many of the other schemes created to rob American production and taxpayers, long before we could actually reap the rewards of our unique work ethic. Golden age indeed!!