Ukraine—US relations

1. Right after Ukraine separated from the Soviet Union in 1991, the United States established its diplomatic relations with the country.

The U.S. has supported Ukraine both politically and financially.

According to the Office of the Coordinator of the U.S. assistance to Europe, Eurasia, and Central Asia, Ukraine has received over $9.5 billion since 1992 from the U.S. government in financial assistance.

“The United States attaches great importance to the success of Ukraine as a free and democratic state with a flourishing market economy,” the U.S. department of state reported on August 27.

Nearly half of the U.S. support, or $4.8 billion, came after 2014, when Russia started the war in the eastern Donbas region and annexed the Crimean Peninsula.

Being Ukraine’s long-term western ally in politics, the U.S. also “will not ever, recognize Russia’s attempted annexation of Crimea.” “The United States remains a staunch supporter of Ukraine’s sovereignty and territorial integrity in the face of Russian aggression,” said U.S. President Joe Biden during the official visit of Ukraine’s President Volodymyr Zelensky to Washington on September 1.

“Ukraine and the United States share common values,” said Biden. “Our support for Ukraine’s Euro-Atlantic aspirations remains unshakable.”

For instance, on September 30, the American-owned company SAFE Boats International got an $84.2 million contract to build six Mark VI high-speed combat patrol boats, the U.S. Department of Defense reported. They will be built by March 2026, the first one already by the next December.

Overall, the U.S. agreed in June last year on 16 of such boats of total worth of $600 million — six for free, while the remaining ten to buy for Ukraine’s navy.

According to the Defense Security Cooperation Agency, it will help “Ukraine to better defend its territorial waters and protect other maritime interests.”

In addition, in its second aid delivery, the U.S. sent Ukraine the medical equipment, ammunition, radars, and weapons to Ukraine on October 18, the Ministry of Defense reported.

In total, the country’s military support of Ukraine in 2021 reached $60 million — one-fifth of what the US allocated this year.

Overall, since 2014 the U.S. has provided Kyiv with $2.5 billion worth of defense assistance, including lethal weapons.

In 2020 alone, the U.S. provided $488.8 million of state and USAID assistance to Ukraine. For instance, it poured $124 million into democracy, human rights, and governance assistance, including the USAID support to improve Ukraine’s ProZorro, an online procurement platform. It saved the Ukrainian government around $1.5 billion last year.

U.S. assistance to Ukraine, 2020

Ukraine—US relations

During the September visit, President Zelensky called the U.S. a “truly strategic partner” during his talk with President Joe Biden.

“We will continue to do everything that we can to support Ukraine’s efforts to develop the capabilities to defend itself and protect its sovereign territory,” said U.S. Secretary of Defense Lloyd Austin during his visit to Ukraine on Oct.19.

2. The US strengthens Ukrainian energy security

Energy security was also a top priority for Zelensky, especially amid the upcoming launch of Russia’s Nord Stream 2 gas pipeline project bypassing Ukraine’s territory.

After Germany and the U.S. top officials agreed in July to allow Russia to finish the project, two countries also agreed to establish a Green Fund for Ukraine of at least $175 million. It will help the country to “promote the use of renewable energy, increase energy efficiency, accelerate the transition from coal, and foster carbon neutrality,” the US Department reported.

The Ukrainian government also makes joint steps with the western partner to cut the dependence on Russia’s energy imports, like nuclear fuel. As a result of several deals signed between Ukraine’s state-owned nuclear energy generating company “Energoatom”  and U.S. nuclear company Westinghouse, six of 15 country’s nuclear units work on non-Russian fuel.

Tarik Choho, president of Westinghouse Electric Company in Europe, the Middle East, and Africa regions, said in his recent interview that the company contributes to Ukraine in its “efforts of increasing energy independence.”

This year, Ukraine was also finally able to finish its 1.5 billion euros project and open its own nuclear waste storage facility near the Chernobyl nuclear power plant. The storage technology was developed by the U.S. company Holtec.

With the launch of a storage facility, Ukraine will no longer have to spend $170 million every year paying for the export of the waste to Russia.

In addition, in May, with the cooperation of aerospace and industrial conglomerate Honeywell, Ukraine’s largest private investor in the energy sector DTEK, launched the country’s first industrial battery energy storage project located in the city of Energodar in the Zaporizhzhya region.

As the 1-megawatt storage system is able to feed in the electricity to the grid and maintain Ukraine’s power system work, it “will help maintain Ukraine’s energy security, and decrease fossil fuel power generation,” according to Kristina Kvien, the U.S. Chargé d’affaires in Ukraine.

By introducing low-carbon energy solutions, DTEK plans to “tackle the challenge of climate change and seeks to transform the energy sector,” said Maxim Timchenko, DTEK CEO.

Thanks to this pilot project, the installation of energy storage systems in Ukraine is no longer a technical problem. After the official launch of DTEK’s pilot storage system the state commission for the matter approved amendments to Transmission System Code and introduced regulatory and technical rules governing the operation of energy storage electrical installations. Two draft laws on amendments to Ukrainian laws in the area of energy security and the development of energy storage systems have been submitted to the Ukrainian parliament.

Already in 2022, DTEK plans to scale its pilot project and install a storage system with a capacity of 50 MW.

3. Economic relations

The United States remains Ukraine’s key trading partner — in 2020, the country was 8th biggest sandwiched between Italy and India. In total, the U.S. had 3.7% share, or $3.94 billion, in total Ukraine’s trade turnover of goods.

Ukraine has a negative trade balance as the import was significantly higher than the export — $2.9 billion versus $980 million, according to the State Customs Service.

According to Ken Roberts, president of the U.S. WorldCity trade data center, the bilateral trade between countries is growing rapidly — this has helped Ukraine rise by more than 20 positions and become the 67th of the US’s 200 trading partners.

“The trade has been growing at a record high for the last three or four years,” said Roberts, Voice of America broadcaster reported on September 16.

While Ukraine exported iron, steel, ores, slags, and preserved foods, the structure of the U.S. import differed: mineral fuels, electrical vehicles, aircraft, and fish and seafood, optical devices, and pharmaceuticals.

Although the total trade decreased by nearly 7% compared to the previous year, it was largely caused by the Covid-19 pandemic, which “negatively affected bilateral relations,” according to the Embassy of Ukraine in the U.S.

At the same time, the trade of services only benefited from the pandemic — for the same period, Ukraine’s export grew by almost 8% and reached $1.39 billion, or 11% of all services the country exported to the world.

In contrast, the import of services from the U.S. decreased by almost 10% to $454 million.

According to the American Chamber of Commerce in Ukraine, the country’s IT industry “strengthens Ukraine’s image as a reliable and innovative IT partner,” RFE/RL reported in April.

Before the pandemic hit the world economy, U.S. foreign direct investment in Ukraine was $596 million in 2019. Compared to a year before, it grew by 12.0%, according to the Office of the United States Trade Representative.

The International Monetary Fund also plays a vital role in Ukraine’s economy.

In addition to the current $5 billion stand-by agreement with Ukraine, on August 23, the IMF transferred an unconditional loan of $1.9 billion of Special Drawing Rights (SDR) monetary reserves to the National Bank of Ukraine.

“What a great present for Ukraine’s Independence Day,” Kateryna Rozhkova, first deputy governor of the central bank, wrote on Facebook.

4. Ukrainian business in the US

As the U.S. is viewed as the perfect place for smart ideas to turn into a business, Ukrainian are trying their luck.

For instance, founded by Ukrainian tech company A.D.A.M. is halfway to starting printing human bones and selling those in U.S. hospitals. The company has already two offices: R&D in the southern Ukrainian city of Odesa and Stanford in California, where the company takes steps to attract investments and enter American markets.

Printed bones are made of body-friendly materials and can be used in orthopedics, plastic surgery, or to treat patients with cancer. The 3D printing machine in the future will be able to print cartilage, skin, and even heart valves.

“We want to avoid transplants. Can you imagine how many millions of cases when people need a transplant in one year?” said Denys Gurak, the company’s CEO, VOA reported on October 11.

Gurak sees the U.S. market as the most promising since unlike in many other countries, where the company would spend a decade to jump into the market, in America, it can be done in two years.

Another startup already successfully operates in the U.S. property market. Called Propertymate, it was founded by two Ukrainians, Bohdan Hnatkovskyy and Sofia Vyshnevska three years ago. A startup currently operates in Austin, Texas, with plans to add two more cities, Dallas and Houston.

It is an online platform, which recently raised $1 million, and provides real estate agents who need access to information about all the new buildings in their area, AIN reported.

“Despite COVID-19, the US primary real estate market is booming,” said Hnatkovskyy.