The Art of a Good Deal: Ukraine’s Strategic Economic Opportunity for the United States

Heidi Crebo-Rediker is a senior fellow in the Center for Geoeconomic Studies at the Council on Foreign Relations.

This Ukraine Policy Brief is part of the Council Special Initiative on Securing Ukraine's Future and the Wachenheim Program on Peace and Security.

Executive Summary

• As President Donald Trump seeks to negotiate a swift end to Russia’s brutal war against Ukraine, he should take into consideration Ukraine’s compelling investment opportunity, rather than view support as a zero-sum drain on U.S. resources.
• The country possesses significant reserves of critical minerals and rare earth elements, has a cutting-edge defense industry, and a robust technology and cyber sector, all of which can offer vast benefits for U.S. economic and security interests.
• Ukraine’s economic and strategic potential aligns directly with U.S. interests in securing economic security and resilience amid ongoing tensions with Russia and China. Retaining control of contested or threatened resources should be a strategic imperative for the United States during peace negotiations to ensure access to those resources, as well as to deny Russia and China access to those same strategic materials.
• As such, protecting Ukraine’s economic assets and growing defense sector should be a key component of any negotiated settlement. Ensuring Ukrainian independence and sovereignty is not just the right thing to do, it is also a good deal for the United States.

Introduction

As President Donald Trump seeks to negotiate a swift end to Russia’s brutal war against Ukraine, he should recognize that Ukraine is a compelling investment opportunity for U.S. economic and security interests, rather than a zero-sum drain on U.S. resources. In fact, even if President Trump takes a purely transactional “America First” approach to negotiations, protecting Ukraine’s democracy, sovereignty, land, and people is entirely consistent with that position. As Senator Lindsey Graham (R-SC) put it after a recent visit to Kyiv, “If we help Ukraine now, they can become the best business partner we’ve ever dreamed of.”

Ukraine possesses vast reserves of critical minerals and rare earth elements, as well as a cutting-edge defense industry and a robust technology and cyber sector. The Trump administration should agree to a comprehensive strategic partnership in critical minerals and rare earths, develop a strategic defense manufacturing cooperation agreement, and support joint U.S. and Ukrainian defense-tech investment ahead of negotiations with Russia. Formalizing the economic relationship alongside the security relationship strengthens Ukraine’s negotiating position, while also reinforcing the United States’ supply-chain resilience, a new defense-innovation industrial base, and commercial interests.

Protecting Ukraine’s economic assets and its ability to contribute to its own security needs—as well as those of the United States and Europe—should be a main component to a cease-fire. Russia knows this, which is why it aims to control or destroy Ukraine’s wealth above and below ground. Any negotiated outcome needs to ensure that Ukraine’s resources remain beyond the reach of Russia and, by extension, China, and instead are available on terms acceptable to Ukraine, the United States, and its NATO allies. Ukrainian independence and sovereignty need to be a U.S. priority not simply for Ukraine’s sake; there is a good deal here to be had for the United States as well.

Commodity Futures: Critical Minerals and Rare Earth Elements

Geopolitical rivalry between the United States and China has put critical minerals at the center of the U.S. national security agenda. Access to critical minerals is now intrinsically linked to the escalating tech and trade tensions that threaten to spill from the economic to the national security arena. Ukraine’s vast reserves of critical minerals and rare earth elements, together with refining and production capacity, are of extraordinary value to modern technologies, advanced defense systems, aerospace, renewable energy, and manufacturing. Senator Graham underscored their value: “They’re sitting on $10 to $12 trillion of critical minerals. . . . They could be the richest country in all of Europe. I don’t want to give that money and those assets to [Vladimir] Putin to share with China.” Ensuring Ukraine retains control of those resources would reduce dependency on Chinese-controlled supply chains. With a formal U.S.-Ukraine agreement to jointly develop those resources, the United States would be the ultimate economic and security beneficiary.

Ukraine’s lithium and titanium reserves are estimated to be among the largest in Europe. They possess substantial deposits of cobalt and nickel, vital for high-performance batteries and aerospace superalloys used in the defense industry. Ukraine also ranks among the top producers of natural graphite in Europe.

Those graphite resources are located in central and eastern regions but, although key mines remain under Ukrainian control, continued hostilities pose a risk to their operational stability. Outside of Ukraine, China has a near-complete chokehold on graphite, and it has imposed export restrictions on the United States. Similarly, Ukraine is the world’s fifth-largest gallium producer, and a major producer of neon gas. Gallium, a rare metal essential for semiconductors and LEDs, has seen its export to the United States also restricted by China. Before Russia’s invasion forced the closure of production facilities, Ukraine supplied 90 percent of the semiconductor-grade neon gas for the U.S. chip industry. A favorable cease-fire would allow the United States to address those vulnerabilities to China by ensuring a new, reliable supplier: Ukraine.

Unfortunately, access to some of Ukraine’s critical mineral deposits remains heavily contested or under threat, particularly in or near the country’s Russian-occupied east. Ukraine will need to ensure that it secures full control of those important economically strategic areas. Doing so will be essential for Ukraine’s long-term economic health, and a boon for U.S. companies. As such, negotiating access to these mineral reserves needs to be a core aim of U.S. and Ukrainian negotiators in any forthcoming cease-fire arrangement.

With access secured and a cease-fire in place, Ukraine’s skilled workforce and established mining and metallurgy infrastructure ideally position the country to modernize its critical minerals sector and related industries. Collaboration with U.S. mining firms, investors, and end users can accelerate this process. The U.S. government should expand the economic toolbox and balance sheet of the U.S. Development Finance Corporation (DFC), Export-Import Bank, U.S. Agency for International Development, and any other relevant agency to support strategic U.S. investment in Ukraine’s mining industry. Retaining control of contested resources should be a strategic imperative for the United States during peace negotiations to ensure access to those resources, as well as to deny Russia and China access to those same strategic materials. This is consistent with the Trump administration’s foreign policy goals as stated by Secretary of State Marco Rubio: “to ensure that our foreign policy is centered on one thing, and that is the advancement of our national interests, which [members of the Trump campaign] have clearly defined through his campaign as anything that makes us stronger or safer or more prosperous.”

Ukraine’s Defense Industrial Base: A Global Powerhouse in the Making

Since the invasion, Ukraine has been forced to redirect much of its economy, innovation sectors, and talent into developing strong, low-cost, and flexible domestic defense capabilities. Those capabilities are now cutting edge and world class. Since the 2022 invasion, this sector has grown more than tenfold. If Ukraine is allowed to remain independent, sovereign, and able to provide its own defense capabilities after the war, Ukraine will boast one of the most modern and competitive defense-industrial bases in Europe, able to take global export-market share from Russia and supply allies with advanced, low-cost, NATO-standard munitions and equipment.

Ukraine’s long defense history began when the country was a cornerstone of the Soviet defense industry, producing tanks, armored vehicles, and missile systems. Today, Ukraine is a global leader in drone warfare, developing cost-effective unmanned systems for reconnaissance and strike operations. Those drones, integrated into Ukraine’s military strategy at a breathtaking pace and level of sophistication, disrupt enemy capabilities at a fraction of the cost of Western equivalents. As former Chairman of the Joint Chiefs of Staff General Mark Milley noted, these drone developments represent “the most significant fundamental change in the character of war ever recorded in history.”

Ukraine has a long-standing connection to the U.S. Department of Defense and defense ministries of NATO members. As Ukraine transitions its defense sector to NATO standards—employing the alliance’s codification scheme so that Ukrainian arms and munitions can be integrated into the NATO defense supply chain—U.S. defense contractors gain the opportunity to coproduce with them and adopt Ukrainian battlefield innovations. Northrup Grumman recently began such a coproduction agreement to produce medium-caliber ammunition, and others have expressed interest. Deepening collaboration would ensure NATO allies have access to affordable, interoperable weaponry, alleviating the financial burden on the United States and advancing transatlantic burden-sharing.

Given Trump’s push to modernize and move the U.S. military to a faster innovation cycle and a lower-cost, autonomous-weaponry strategy, working with Ukrainian drone and defense-tech companies is a significant opportunity to forge a joint U.S.-Ukraine defense innovation complex. It could even contribute to the efforts of Congress and even Elon Musk’s nascent Department of Government Efficiency to cut spending while increasing efficiency. Given existing Ukrainian cooperation with the Department of Defense’s Defense Innovation Unit and Silicon Valley, together with expanding the DFC’s mandate to include dual-use investments, much like the European Union did through the European Investment Bank in 2024, the United States could supercharge a powerful counter to growing Russian, Chinese, and Iranian dominance in autonomous warfare.

Information Technology and Cybersecurity: A Rising Digital Powerhouse

Ukraine’s information technology (IT) sector, one of Europe’s most advanced and fastest growing, has remained resilient during the conflict. Ukraine excels in software development, artificial intelligence (AI), and cybersecurity, important across industries from financial services to advanced manufacturing and infrastructure.

Long before the onset of the 2022 confrontation with Russia, Ukraine forged strong ties with Silicon Valley, collaborating with firms such as Google, Microsoft, and Oracle. Amazon/Amazon Web Services and Palantir established operations in Ukraine as the war began to counter Russian cyber and communications threats and support Ukrainian intelligence. Defense tech start-up companies like Shield AI now collaborate even more directly on the battlefield. Many employees of those companies are Ukrainian, and many Ukrainians who returned home to support the war effort worked in Silicon Valley. Ukraine is on the path to becoming the world’s research and development “Mil-Tech Valley,” emerging as an entrepreneurial hub for military dual-use technology and beyond, accelerating innovation in AI-empowered systems.

Ukraine’s experience countering Russian cyberattacks has also positioned it as a leader in cybersecurity. It can offer expertise to bolster NATO’s defenses. For U.S. firms, Ukraine presents a cost-competitive option for outsourcing and joint research in AI and cybersecurity, thereby diversifying those supply chains and strengthening digital security.

Conclusion

Ukraine’s economic and strategic potential aligns directly with U.S. interests in securing economic security and resilience amid ongoing tensions with Russia and China. Russia will almost certainly enter cease-fire talks with the objective of dominating Ukraine’s political, military, and economic future. Any peace negotiations spearheaded by the incoming U.S. administration need to ensure Ukraine retains sovereignty over its economic wealth and future capacity. Not only for Ukraine’s sake, but also to ensure that the United States and its allies retain access to the benefits Ukraine can provide. By investing in Ukraine’s industries and integrating them into Western markets, the United States can advance both its national security and its economic leadership, secure resilience, and strengthen NATO, while simultaneously preventing Russia and China from access to those very same resources.

Supporting Ukraine is an act of solidarity. It is also a strategic investment in the future of U.S. and European security and prosperity. The United States cannot pass up this opportunity.

This work represents the views and opinions solely of the author. The Council on Foreign Relations is an independent, nonpartisan membership organization, think tank, and publisher, and takes no institutional positions on matters of policy.