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The US-Ukraine Critical Minerals Deal Breaches The Budapest Memorandum – OpEd

May 7, 2025May 7, 2025 Geopolitical Monitor 0 Comments

By Igor Desyatnikov

When Ukraine surrendered its nuclear arsenal in 1994 — then the third largest in the world — it did so in exchange for solemn guarantees from the United States, United Kingdom, and Russia. The Budapest Memorandum pledged that these powers would respect Ukraine’s sovereignty, refrain from military threats, and critically, would not use economic coercion to subjugate Ukraine to their own interests.

Now, more than thirty years later, the Trump administration has undermined that agreement and violated its explicit terms. The breach is not metaphorical or symbolic. It is real, deliberate, and legally consequential.

Article 3 of the Budapest Memorandum is unequivocal: the signatories committed to “refrain from economic coercion designed to subordinate to their own interest the exercise by Ukraine of the rights inherent in its sovereignty.” This clause ensured that Ukraine’s political and economic independence would be respected by great powers, particularly those with a permanent seat on the UN Security Council.

Yet, the Trump administration has done precisely what that article forbids. By leveraging US security support and diplomatic access to pressure Ukraine into granting exclusive access to its rare earths and battery minerals, Washington has turned a security guarantee into a quid pro quo of imperial design. The proposed deal, aggressively pursued through diplomatic backchannels, would grant US firms privileged extraction rights — under the shadow of continued Russian aggression and with no meaningful Ukrainian leverage nor explicit security guarantees.

This is economic coercion by any reasonable interpretation of the term and a textbook breach of the obligations the U.S. undertook in 1994.

The structure of the proposed minerals deal resembles the worst of 19th-century extractive diplomacy: resource-for-protection agreements imposed by powerful nations upon vulnerable ones. In this case, Ukraine is being pressured to trade access to its sovereign mineral wealth not for mutual development or investment but for continued political and military support — a role the United States is already obligated to uphold under the Budapest Memorandum and one that it reserves to abandon at any time by refraining from codifying security guarantees sought by Kyiv.

To coerce a nation already under foreign occupation — and one that gave up nuclear weapons in reliance on American assurances — is to exploit its vulnerability in a moment of maximal dependency. It violates not only a treaty-level memorandum but also basic moral responsibility.

Ironically, the United States is now guilty of breaching the same document it once cited to condemn Russia. When Moscow annexed Crimea and launched its covert war in the Donbas, US officials rightly pointed to the Budapest Memorandum as a framework Russia had violated. But if military conquest breaks one clause, economic subjugation breaks another. Both strike at the core of Ukrainian sovereignty.

Under Trump, US policy has begun to mimic Russia’s strategy of transactional dominance: using carrots and sticks to extract concessions from smaller nations while publicly professing mutual respect. In both cases, the result is the same: Ukraine’s independence is treated as conditional.

The implications are dire and extend far beyond Ukraine. If Washington is willing to abandon a major security commitment — one directly tied to nuclear nonproliferation — for short-term resource access, what other commitments might it walk away from?

The Budapest Memorandum was not just about Ukraine. It signaled to all non-nuclear states that disarmament would be honored and rewarded. Breaching that compact not only damages US credibility with Kyiv but with Seoul, Taipei, and every other capital that relies on US assurances for its security.

Moreover, this conduct undermines the broader post–Cold War security order, which rests on the idea that great powers will act within rules and uphold their own commitments. If the United States cannot be trusted to keep its word, it forfeits its ability to lead a coalition of rule-abiding states.

Some may argue that the Budapest Memorandum is not a treaty and, therefore, lacks enforcement mechanisms. That is legally true but strategically irrelevant. It is still a formal, signed diplomatic agreement deposited with the United Nations. It also contains unambiguous language, committing its parties to refrain from specific actions, including economic coercion. Its authority lies not in the threat of enforcement but in the integrity of the states that signed it. To break it is to telegraph to the world that US commitments are conditional, transactional, and revocable at will.

The Trump administration’s conduct not only violates the commitments made under this specific memorandum but casts doubt on any other “understandings” or “agreements” it might sign in the future. Who would believe a promise from a state that honors its legal commitments only when convenient?

In breaching the Budapest Memorandum, the Trump administration has not only betrayed Ukraine, it has undermined decades of nonproliferation efforts, eroded US diplomatic credibility, and set a precedent that weakens the power of any future American assurance. This is not simply a foreign policy mistake — it is a strategic own-goal with global consequences.

America’s strength lies in its combination of power and trust. The former may still be intact, but the latter is slipping. If this trajectory continues, we will look back on the Budapest breach not as a footnote — but as a turning point.