The sellout of Ukraine
Russia will keep the occupied territories in eastern Ukraine and Crimea; the US will control 50% of Ukraine’s mineral resources and refrain from supplying arms to Ukraine; the US will assure Russia that Ukraine will never become a member of NATO; Russia will agree not to make further territorial claims on Ukraine.
These are the reported sell-out aspects of the Machiavellian Trump-Putin deal on Ukraine. The provisions for security guarantees on either side are unclear.
The deal is a grim reminder of the Molotov-Ribbentrop Agreement of August 22, 1939 for the partition of Poland. Just as both Hitler and Stalin knew that this was merely a temporary truce without any institutional mechanisms to safeguard the sovereignty of Poland, so also both Putin and Trump are aware that this deal is a transactional arrangement for mutual benefit – rare earths for the US and strategic depth for Russia – disregarding the independence and sovereignty of Ukraine.
The deal fundamentally alters, even if temporarily, NATO’s raison d’etre: the containment of Russia.
China’s mineral squeeze
Linking US control of 50% of Ukraine’s mineral wealth with the cost of US arms transfers to Ukraine, estimated by Trump at $350 billion, is a clever red herring. China has the largest reserves of rare earths and accounts for 98% of global production of gallium, ~60% of germanium, ~70% of graphite, ~80% of tungsten and 48% of antimony.
It has banned the export of gallium and germanium and other rare minerals to the US. The US requires them for various defence applications, especially the manufacture of high-end semiconductors, and other dual-use commodities and technologies.
Ukraine is the world’s fifth-largest gallium producer and a major producer of noble gases, supplying 90% of the highly purified semiconductor-grade neon to the US chip sector.
This Chinese ban is the engine driving the colonisation of Ukraine’s mineral reserves particularly gallium and germanium.
China’s technological challenge
Responding to years of systematic denial of sensitive commodities and technologies, especially those related to semiconductors, by US export controllers, China has made enormous investments for self-sufficiency in major categories of sensitive commodities and technologies.
Technological research and development has been the source of America’s economic and military strength. China is the only country which has roughly matched America’s annual R&D expenditure of ~$880 billion (the yuan is widely accepted as undervalued compared to the dollar).
China has achieved remarkable breakthroughs in the development and fabrication of semiconductor chips of up to seven nanometres, and made astonishing inroads into the manufacture of lithography machines.
All this is in the face of a complete US embargo on the export of advanced semiconductor chips, production and test equipment, and related technology and software through appropriate amendments to the US Export Administration Act and US Export Administration Regulations. All G7 countries participate in this embargo.
China has emerged as the leader in green technology like solar and rare earth materials, where it owns the entire supply chain from mining to processing. It produces the largest number of top-quality STEM graduates in the world to power its high- and medium-tech industries. It is a world leader in mining and minerals, metallurgical and chemical engineering. It is far ahead of the US in electric vehicle technology.
The Chinese financial, manufacturing and regulatory challenge
China has over the years acquired financial muscle and state-of-the-art manufacturing infrastructure that not only destroyed much of the manufacturing in the continental US, but has also succeeded in attracting US multinationals to set up production plants in China.
US companies like Tesla and Apple have heavily invested in China, and the dislocation of trade with China, in the event that Trump’s threat of imposing up to 100% tariffs is carried out, would be massive.
It is not possible to bring back skilled jobs to the US because it does not have the required amount of skilled workforce that is being utilised by American companies that have set up production plants and facilities in China. Tariffs cannot bring back jobs to the US in areas where Chinese technology, skill and infrastructure is world-class.
In a major blow to the global reliance on US treasury bonds, China has withdrawn about $560 billion from US treasury holdings, which stood at $1.3 trillion in 2013. This, despite the increasing rate of interest. China has, like Mexico and Canada, retaliated with counter tariffs to the 10% tariffs imposed by Trump.
In response to American semiconductor export controls, China has unleashed its own extraterritorial export controls on other countries’ exports to the US, including from Japan and Korea.
While the exact de minimis rule in Chinese export control laws for re-export authorisation is unclear, China now requires several countries to obtain re-export authorisation for export to the US of any commodity or technology containing sensitive Chinese dual-use parts, components, material, subsystems, software or technology.
This tit-for-tat export control between the US and China can disrupt global supply chains and create shortages of mass-produced commodities like semiconductors. It is in this context that Trump is expected to seek a modus vivendi to de-escalate the technology and trade war with China.
The China-Russia-BRICS axis
The techno-military arm of the China-Russia axis which Putin and Xi have called a ‘no limits partnership’ was reaffirmed by them dramatically on February 24, 2025, the third anniversary of Russia’s attack on Ukraine.
Unable to break the Chinese and Russian resistance to America’s sanctions and technology denial regime, Trump has launched an elaborate exercise of deflection. Photo: Presidential Executive Office of Russia/Wikimedia Commons. CC BY 4.0.
The Sino-Russian dominance of BRICS, which Trump recently trashed as ‘dead’, has essentially sustained Russia’s war in Ukraine by circumventing US sanctions and SWIFT through BRICS Pay, the System for Transfer of Financial Messages or SPFS, the Cross-border Interbank Payment System and by the massive intra-BRICS trade in local currencies with India, China, Indonesia, Brazil, South Africa, Iran, the UAE and Saudi Arabia, and with the large number of other countries participating in China’s belt and road initiative (BRI).
Though not directly supporting de-dollarisation, China’s current currency swap agreements, mainly with BRICS and their central banks, is about US$562 billion.
Unable to break the Chinese and Russian resistance to America’s sanctions and technology denial regime, Trump has launched an elaborate exercise of deflection by targeting relatively less important issues, and ceding ground to both China and Russia.
Lampooning Biden for the war in Ukraine, inviting Xi for his inauguration as president and the propaganda about his personal chemistry with Putin is a huge coverup of America’s strategic defeat by the Russia-China axis.
Trump’s diversionary propaganda, flamboyance and coverup
Trump has resorted to diversionary propaganda of threats to the US from:
- an estimated 11-14 million illegal immigrants who have been living in America for the past two decades, but whose deportation could cause the US economy to contract by as much as 6.8%
- tariffs imposed by developing countries like India, whose contribution to the US trade imbalance is a small fraction of the trade imbalance it has with its major trading partners
- the Paris Accord on Climate Change that Trump has so flamboyantly dumped because its success is anchored largely on solar energy, the infrastructure and technology of which is completely dominated by China
- the UNHRC, WHO, UNCLOS and even the UNGA, which have all been sidelined by Trump
- Muslims entering the US, against which Trump had once called for a “total and complete shutdown”.
The threat to the US from China is understated.
America’s alarming deficit and debt
Trump’s decision to halt arms supplies to Ukraine, present an arms bill of $350 billion and an attempt to grab its mineral resources ought to be seen in the context of a mounting US national debt of about $35.46 trillion and an interest liability of about $1 trillion.
It also needs to be viewed in the context of the US deficit in 2024 (expenditure over revenue) of $1.83 trillion, and the trade deficit of approximately $1 trillion.
According to data from the Office of the US Trade Representative, the countries that are mainly responsible for the US goods trade deficit in 2024 are China ($295.4 billion), EU ($235.6 billion), ASEAN ($227.7 billion), Mexico ($171.8 billion), Japan ($68.5 billion), Canada ($63.3 billion) and South Korea ($66.0 billion).
The developing world has only a marginal role in America’s mounting trade deficit. The pushback to Trump’s attempt to impose additional tariffs has come and will continue to come from the developed countries.
Obstacles in the way of Trump’s attempted loot of Ukraine
China has been the biggest trading partner of Ukraine and has invested in Ukraine’s road and rail infrastructure especially after Kyiv signed the memorandum of understanding supporting the BRI in 2017. It is ideally placed to partner with Ukraine in extracting, processing and transporting Ukraine’s rare earth minerals.
What is standing in the way of an American loot of Ukraine’s massive rare earth minerals is not just Zelenskyy’s public display of defiance of Trump and Vance right inside the Oval Office, but the clear possibility that even if Zelenskyy or any future Ukrainian president is to yield to Trump’s bullying, the US will not be able to implement a loot agreement due to popular resistance and the subsequent rejection of an ‘unequal treaty’.
There are numerous instances of this, such as: the rejection of the Durand Line of 1893 by Afghanistan; the rejection of the McMahon Line of 1914 by China; and the rejection by Germany of war reparations and the occupation of the Ruhr and Saar embodied in the Treaty of Versailles of 1919.
The danger for the US is that while Russia could keep its end of the agreement, the US could definitely face future resistance to implementing the agreement not only from Ukraine but also from the rest of Europe.
The option for Ukraine to partner with China for exploiting its rare earth resources would always be there, especially as Russia is a strong supporter of the BRI.
The option of a cold peace
It is absolutely possible for Ukraine to agree to a ceasefire with Russia through mediation from EU countries without acknowledging the Russian annexations of Crimea, the Luhansk oblast, the Donetsk oblast and parts of the Zaporizhzhia and Kherson oblasts.
India presents a perfect example of this cold peace with China and Pakistan. India claims all of Pakistan-occupied Kashmir and Gilgit Baltistan, also occupied by Pakistan, as an integral part of India. Similarly, it claims the Shaksgam Valley ceded by Pakistan to China in 1963, and Aksai Chin occupied by China in 1962 as integral parts of India. This is a claim backed by a non-partisan parliamentary resolution.
Zelenskyy is right when he says: “I will not sign what ten generations of Ukrainians will have to pay back”. Today he has the backing of almost all countries except Russia and the US. For him to accept the humiliating peace deal proposed by Trump would be worse than the cowardly action of British Prime Minister Chamberlain signing the Munich Agreement with Hitler in September 1938, which he ridiculously called “peace for our time”.
Concluding remarks
First, there is palpable exhaustion in Europe with the war in Ukraine. The London Summit of European leaders on March 2 gave a clear indication that Europe is prepared to be the main interlocutor, with US support, to stop the war without a near-term agreement on the status of territory occupied by Russia.
Second, America’s apparent slide from global policeman to ‘hemisphere defence’ is tactical and misleading. Financially cramped, the US wants a greater role by Europe in their own security, something that European leaders seem to have agreed to.
Third, Trump recognises that China is America’s main opponent and that it is narrowing the technology gap with the US. Consequently, there appears to be an attempt to wean Russia away from China, remove sanctions on Russia, release several hundred billion dollars of Russian frozen assets and blunt the Russian de-dollarisation initiative that has created panic in the Trump administration. In short, the attempt is to mainstream Russia, as never before.
Fourth, the attack on Biden is designed to justify the unprecedented strategic manoeuvre with Russia.
Nevertheless, the Trumpian aura of a break from the past appears to be overstated. Ever since the collapse of the Soviet Union, America has continued to expand NATO to the farthest point right up to the gates of Moscow, which is merely 523 miles away from the erstwhile Ukrainian border.
How far Trump would go with this theatrical break from the past would depend on his administration’s assessment of how big the threat is not only from China but also from the China-Russia axis.
Rahul Singh is a former civil servant who retired from the Ministry of Defence.
