Inside the U.S.-Ukraine Mineral-Rights Deal

Summary

WSJ What’s News: Inside the U.S.-Ukraine Mineral-Rights Deal Release Date: February 26, 2025

The Wall Street Journal’s “What’s News” podcast episode titled “Inside the U.S.-Ukraine Mineral-Rights Deal” delves into significant geopolitical and economic developments shaping global markets. Host Luke Vargas navigates through pivotal discussions, including the recently agreed-upon U.S.-Ukraine mineral rights deal, the House Republicans' budget plan, President Trump's proposed gold visa program, and insights from investing columnist Spencer Jacobs on U.S. growth stocks. Below is a comprehensive summary of the episode’s key segments.

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1. U.S.-Ukraine Mineral-Rights Deal

Agreement Overview: Ukraine and the United States have finalized the terms of a mineral rights agreement, poised for signing by President Donald Trump and President Volodymyr Zelenskyy in Washington as early as Friday.

Key Details:

• Economic Provisions: Unlike the initial U.S. draft which proposed aggressive economic demands, including a claim to future mineral proceeds up to $500 billion (Ian Levitt, [01:26]), the final deal establishes a fund where Ukraine contributes 50% of the proceeds from mineral resource development. The U.S.'s exact stake in this fund remains to be determined in future negotiations.
• Security Guarantees: The initial draft lacked security guarantees for Ukraine. The finalized agreement maintains this absence, focusing solely on economic collaboration without explicit security commitments ([01:26]).

Potential Impact:

• Mineral Supply Chain: Ukraine holds deposits of at least 20 of the 50 U.S. designated critical minerals. However, up to 40% reside in regions currently under Russian control, posing challenges for access and development ([02:32]).
• Commercial Viability: The development of these minerals necessitates extensive investment and time, with many deposits yet to be mined. Levitt emphasizes the long-term nature of realizing these resources' commercial potential ([02:52]).

Quote:

“The final deal is less ambitious both for Ukraine and for the US than I think the respective sides had potentially been hoping for.” — Ian Levitt, Foreign Correspondent [01:26]

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2. House Republicans Pass Budget Plan

Legislative Progress: House Republicans successfully passed a budget blueprint, garnering support from all but one GOP lawmaker. This plan aligns with President Trump’s agenda for tax, border, and spending cuts.

Key Components:

• Spending Cuts: The blueprint proposes at least $1.5 trillion in spending reductions over a decade, targeting significant cuts to Medicaid, a contentious issue causing intra-party divisions.
• Energy and Commerce Committee: Over half of the spending targets originate from this committee, which oversees Medicaid, although the blueprint does not explicitly mention the program ([03:50]).

Political Landscape:

• Senate Opposition: The Senate favors more substantial tax cuts and intends to modify the House’s blueprint rather than adopt it wholesale, indicating a challenging path for the bill’s passage.
• Republican Unity: Despite slim majorities in Congress, the budget plan signifies Republican capability to pass major legislation, though internal disagreements persist ([03:50]).

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3. President Trump’s $5 Million Gold Visa Proposal

Program Details: President Trump introduced a $5 million gold visa aimed at wealthy individuals seeking permanent residency and a potential pathway to U.S. citizenship.

Features:

• High Investment Threshold: The proposed visa requires a significant financial commitment of $5 million, positioning it as an exclusive option for affluent investors.
• Corporate Sponsorship: Companies like Apple might utilize this program to sponsor highly skilled workers for permanent residency, replacing the existing EB5 visa system ([03:50]).

Challenges and Considerations:

• Legislative Approval: The EB5 visa was established by Congress, raising questions about the president’s ability to overhaul the program without legislative consent. Details on the new visa’s implementation are expected within weeks, but the next steps remain uncertain ([05:32]).

Quote:

“The next steps are unclear. The president has said that he is going to roll out the details of this program in the next few weeks.” — Ian Levitt [05:32]

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4. Changes to Illegal Immigrant Registry

Regulatory Shifts: The Trump administration has instituted a new registry mandating that undocumented immigrants, including children aged 14 and older, submit personal information such as fingerprints and home addresses.

Enforcement Measures:

• Penalties: Failure to comply may result in fines up to $5,000 and imprisonment for up to six months.
• Legal Status: Previously, illegal immigration was treated as a civil offense, allowing detention without criminal charges. The new regulations elevate the status to criminal offenses, intensifying enforcement ([05:51]).

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5. Investing Insights: U.S. Growth Stocks vs. Global Alternatives

Expert Analysis: Investing columnist Spencer Jacob discusses the widening gap between the expected returns of U.S. large growth stocks and more affordable non-U.S. developed market large value stocks.

Key Findings:

• Valuation Disparity: U.S. large growth stocks are at their 98th percentile in terms of expense relative to historical norms, indicating extreme overvaluation ([07:43]).
• Projected Returns: Research suggests non-U.S. developed market large value stocks could yield approximately 10% annually over the next decade, contrasting sharply with the projected 1.8% for U.S. large growth stocks, which fails to keep pace with inflation ([08:33]).
• Historical Context: The analysis is based on 35 years of data, providing a robust historical framework for the projections ([08:33]).

Investment Cautions: Jacob advises caution, emphasizing that while the valuation gap presents a potential opportunity, market timing is unpredictable. Long-term investors may benefit from diversifying into undervalued markets, whereas speculators seeking quick gains might not find immediate success ([10:13]).

Quote:

“Non US developed market large value stocks could return about 10% a year over the next decade, whereas US large growth stocks could return 1.8% a year, which is negative after inflation.” — Spencer Jacob, Investing Columnist [08:33]

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6. Market-Moving News

AB InBev Share Surge: AB InBev’s U.S. listed shares experienced significant gains in after-hours trading following robust growth in its U.S. market share, driven by brands like Michelob Ultra and Busch Light. However, global performance was mixed, with fourth-quarter sales volumes declining due to sustained weakness in China ([11:29]).

Copper Prices Rise: Copper prices climbed after White House officials announced investigations into imposing global import tariffs on the metal. Senior administration members highlighted the need to spur domestic production but did not specify the potential tariff rates or timelines ([11:29]).

Upcoming Earnings Reports: Major companies are set to report earnings, including Lowes, TJX Companies (owner of TJ Maxx), Salesforce, and Nvidia. Additionally, the Department of Commerce is scheduled to release new home sales figures for January at 10 AM Eastern ([11:29]).

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Production Credits: Today's episode was produced by Daniel Bach and Kate Bullivant, with supervising producer Christina Rocca.

Closing Remarks: Luke Vargas concludes the episode by highlighting the production team and indicating the return of a new show the following night.

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Notable Exclusions: The summary excludes advertisements, introductory spots, and promotional segments featuring Tim Higgins and Christopher Mims, ensuring a focused overview of the episode’s substantive content.

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For in-depth coverage and real-time updates, listeners are encouraged to tune into the “What’s News” podcast available across various platforms.

Transcript

[Tim Higgins]

Tim I'm Tim Higgins with the Wall Street Journal. We've got this spot to hear directly from the leaders behind the bold name companies we cover every day. Check out bold names from the Wall Street Journal wherever you get your podcasts.

[Luke Vargas]

Ukraine agrees to a mineral rights deal with the U.S. we'll get the latest from Kyiv. Plus House Republicans pass a budget plan overcoming disagreements on the size of proposed spending, and President Trump floats a $5 million gold visa for wealthy individuals.

[Ian Levitt]

Trump said the new program would eventually provide a pathway for full citizenship and companies like Apple could pay to get approval for high skilled workers to live in the U.S. permanently.

[Luke Vargas]

It's Wednesday, February 26th. I'm Luke Vargas for the Wall Street Journal and here is the AM edition of what's news, the top headlines and business stories moving your world. Today, the US And Ukraine have agreed to the terms of a mineral rights deal that could be signed by President Trump and President Volodymyr Zelenskyy in Washington as soon as Friday. Zelenskyy had said for months Ukraine's allies could have access to the country's mineral resources, but that an agreement would need to include security guarantees. So how does the final deal measure up? I asked Journal foreign correspondent E. And Lovett.

[Ian Levitt]

So the final deal is less ambitious both for Ukraine and for the US Than I think the respective sides had potentially been hoping for. Last week the US Presented Zelenskyy with a draft that had some pretty aggressive economic demands in it, and the most notable of those was that the US Would have the right to future proceeds from mineral resource development up to $500 billion, but it did not have security guarantees of any kind for Ukraine. This deal, by contrast, really has neither of those things. The economic provisions are just that there will be a fund established that will put some portion of proceeds from mineral resource development in Ukraine into a fund that will then go towards investment in Ukraine. Ukraine will pay 50% into that fund, and it's unclear exactly what kind of stake the US Might have in that fund or in other kind of joint ownership projects that is set to be hashed out in future agreements. But there are also no security guarantees in this deal for Ukraine.

[Luke Vargas]

Given that, Ian, I would imagine it would be extra important for Ukrainian officials for this deal to become commercially viable. Analysts, you report, estimate the potential value of those minerals could amount to trillions of dollars. But what is the outlook for those critical minerals actually entering the US Supply chain eventually?

[Ian Levitt]

Yeah, part of the appeal from the Ukrainian side of doing some sort of mineral rights deal with the US is that they hoped it would keep the US Invested in Ukraine's future and keeping the country sovereign under Ukrainian control in a way, so that whatever economic benefit the US Stood to gain that they would want to make sure that they could get that. Ukraine is believed to have deposits of at least 20 of the 50 minerals that the US government has designated as critical. A lot of these have never been developed. Up to about 40% of them are currently in parts of the country that are under Russian control. And so access to those, you know, we don't know when, if ever, Ukraine might get control of those areas back. And even in the areas that Ukraine does control, many of the minerals there have never been mined. And it would take years of studies and hundreds of millions of dollars in investment in some case before any of those deposits started becoming commercially viable and potentially turning a profit.

[Luke Vargas]

That was foreign correspondent Ian Levitt in Kyiv. House Republicans squeezed through a budget blueprint late last night, with all but one GOP lawmaker backing the framework for President Trump's tax, border and spending cut agenda. The plan, which likely won't accommodate all of the tax reductions Trump wants, calls for at least $1.5 trillion in spending cuts over a decade and will require significant cuts to Medicaid, an issue that's left House Republicans deeply div. While party leaders say the blueprint doesn't specifically mention Medicaid, more than half of the concert targets will come from the Energy and Commerce Committee, which has jurisdiction over the program, though its passage is a sign Republicans can deliver major legislation despite holding slim majorities in Congress, the budget plan faces a complicated path ahead. The Senate, which favors larger tax cuts, plans to alter the House blueprint rather than accept it. In a shakeup of American visa programs, President Trump plans to roll out a $5 million gold card Visa that would allow wealthy people to buy permanent residency and potentially provide a pathway to full citizenship. Trump says the US could sell a million gold cards and that they would enable companies like Apple to pay to get approval for highly skilled workers to live in the U.S. the new visas would replace the existing EB5 visa that offers green cards to people who invest in the US A that has been plagued by cases of fraud but which Journal White House reporter Tarini Party said also enjoys strong bipartisan support in states that have benefited from it.

[Ian Levitt]

The next steps are unclear. The president has said that he is going to roll out the details of this program in the next few weeks. The EB5 system was created by Congress, so it remains unclear how he is going to be able to make changes to an existing program without the approval of Congress.

[Luke Vargas]

Meanwhile, the Trump administration has created a registry where immigrants in the US Illegally will have to submit their personal information or face fines and prison time. According to documents seen by the Journal, those immigrants, including children 14 and older, would be required to submit their fingerprints and home addresses. Those who fail to do so could be fined up to $5,000 and sentenced to up to six months in prison. Previously, immigrants in the country illegally were committing a civil offense and could be detained but weren't considered to have committed a crime. Coming up, investing columnist Spencer Jacobs stops by to discuss the widening gap between the expected returns for large US Growth stocks and cheaper alternatives abroad. That and other news moving markets after the break.

[Christopher Mims]

I'm Christopher Mims of the Wall Street Journal. Every day we talk to the leaders behind bold name companies and you can hear from them in bold names from the Wal Wall Street Journal. Wherever you get your podcasts.

[Luke Vargas]

America's biggest growth stocks have a big, expensive problem. So writes the Journal's investing columnist Spencer Jacob, who's been tracking data that compares the expected returns of those stocks against cheaper alternatives. And he's here to share what that data has been turning up. Spencer, the premise of your latest column is that there's been a bit of unusual activity in the relationship between the performance of the S&P 500 and the MSCI, IFA, IFA standing for Europe, Australasia and the Far East. So broadly here, US Stocks versus non US Developed market stocks. And namely, it's that this relationship lately has been trending way outside of historic norms. Break this down for us.

[Spencer Jacob]

Yeah. And it could be a wake up call because it comes at a time when US Stocks are very expensive and that was supercharged a bit by Trump's reelection. You had the Trump trade, Trumpforia, whatever you want to call it, and the last several days it's moved into reverse. The correlation between the two is lower than it has been all but maybe 0.3% of the time. But I think the more interesting thing is just how expensive US Stocks still are today, especially these large growth stocks that have driven the market, you know, Nvidia, Microsoft, Google, Amazon, Apple, et cetera, et cetera, compared to really everything else in the world.

[Luke Vargas]

And how you measure how expensive they are has a lot to do with their predicted returns. You hook up with research affiliates to kind of look at their 10 year forecast for a number of different categories. What did you find?

[Spencer Jacob]

Yeah. Nothing good. First of all, if you look at how expensive they are Relative to all of their history, developed market large growth, which was dominated by US companies, is at its 98th percentile. That means it has only been more expensive 2% of the time in history. Non US large value stocks have only been cheaper 2% of the time. So that is a record spread between those two types of stocks. Now, you might look at some of these companies like Nestle or BP or Shell or Roche in Switzerland and say, like, well, they're slower growing, but even if they're much slower growing, they're so much cheaper that their prospective return is far superior to the US and so the numbers that they come out with are that non US developed market large value stocks could return about 10% a year over the next decade, whereas US large growth stocks could return 1.8% a year, which is negative after inflation. So it's a gigantic difference. And I just would point out that research affiliates, they only look for their projecting returns over the last 35 years. So, you know, really since the computer era. So, you know, if you're saying you can't compare that old era technologically, we have data going back to the 1870s, 70s for US stocks. No, I guess you probably can't. But they're giving you the benefit of the doubt if you say that and they're saying, yeah, we'll just take the last 35 years, it's still true.

[Luke Vargas]

And Spencer, lest someone be very tempted right now to put the podcast down and go and trade on the basis of some of the analysis you've just given us, of course it's not always that easy. And there could be factors that conspire to make this not be the winning bet over the coming decade.

[Spencer Jacob]

I'm sure nothing is guaranteed. I mean, yeah, I would say that valuation is really interesting if you're just reading or hearing about it today, that there's this gigantic gap in valuation, it might seem like something you should rush out and do and change your portfolio. And I would just caution that had we had this conversation a year ago, it wasn't as extreme, but it was still fairly large gap a year ago. And you'd be kicking yourself because US Growth stocks did really well last year and European value stocks just did so. So, so you would not have done as well. You know, valuation is not a timing tool. It works in the long run, it does not work in the short run. If you are into trying to catch a dip or a turning point in the markets, this is not for you. If you're an investor rather than a speculator, that is you know you're putting money away for money that you'll need in 10, 20 years, then you should pay attention because it's a gigantic difference in terms of the amount of money that you could have if Research Affiliates is even close to being correct.

[Luke Vargas]

Spencer Jacob is the Wall Street Journal's investing columnist and he edits our Markets AM newsletter, which you can subscribe to for free at the link we've left in our show notes Spencer, thanks so much for dropping by.

[Spencer Jacob]

Hey, thanks a lot.

[Luke Vargas]

And in news moving markets today, US listed shares in Budweiser brewer AB InBev are sharply higher in off hours trading after it reported growth in its US Market share on the backs of its Michelob Ultra and Buschlight brands. The company's global results left more to be desired, though. Fourth quarter sales volumes fell, dragged by lingering weakness in China. Copper prices are rising after White House officials said the US Would investigate imposing global import tariffs on the metal. Senior administration officials said the probe was necessary to spur domestic production, but declined to say how high the tariffs could be or when they could be imposed. And on deck today, Lowes and TJ Maxx owner TJX companies are reporting earnings this morning with Salesforce and Nvidia following this afternoon. And the department will release new home sales figures for January at 10am Eastern. And that's it for what's news for this Wednesday morning. Today's show was produced by Daniel Bach and Kate Bullivant with supervising producer Christina Rocca. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show.

[Tim Higgins]

Until then, thanks for listening. Every day, Wall Street Journal reporters talk with the most powerful, influential and interesting people. And now we're bringing some of those conversations directly to you. I'm Tim Higgins.

[Christopher Mims]

And I'm Christopher Mims. We're teaming up to ask tough questions of the leaders behind the bold name companies found in the pages of the Journal every day. Are you going to build that $20,000 vehicle?

[Spencer Jacob]

No, because that market sucks.

[Tim Higgins]

Check out bold names from the Wall Street Journal wherever you get your podcasts.