Disagreements over Ukraine have triggered internal conflict within the U.S. government, with Treasury Secretary Bessent publicly denouncing Commerce Secretary Lutnick as a "fool."
Late last week, U.S. media reported that a rift had emerged between Treasury Secretary Bessent and Commerce Secretary Lutnick over a minerals and rare earth agreement with Ukraine. During their heated argument, Bessent angrily called Lutnick a "fool" in person.
The disputed agreement, formally titled the "U.S.-Ukraine Reconstruction Investment Fund Natural Resources Cooperation Agreement," is a cornerstone of Trump's geopolitical economic strategy during his second term. After a six-month negotiation process, it was finally signed and implemented at the end of April last year.
Bessent, who initially led the entire initiative and personally oversaw negotiations in Kyiv, advocated for a controlled, implementable, and self-sustaining model. He emphasized maintaining the core objective of "offsetting aid costs to Ukraine through mineral resources," but cautioned against overly aggressive terms. He warned that if the demands were too harsh, Ukraine might reject the deal entirely, leaving the U.S. without any mineral rights—rendering all prior diplomatic efforts futile. While he supported moderate concessions on debt terms, he insisted on securing long-term priority procurement rights and control over supply chains, aiming for stable, practical, and sustainable strategic gains.
By contrast, Lutnick favored an extreme and aggressive approach, insisting on retaining the original exploitative and stringent draft. He refused to remove key provisions such as "recovery of historical U.S. aid-related debts" and "unilateral U.S. control of the fund." Even if talks collapsed, he would not yield on sovereignty issues, arguing that any concession would result in massive U.S. financial outlays without strategic benefit and would erode American strategic initiative.
As a result, the conflict between the two escalated uncontrollably into open confrontation.
From the Treasury Department’s perspective, Bessent focused on national fiscal accounting and risk management, rigorously calculating total U.S. aid expenditures, the fund’s payback timeline, and external debt levels. His goal was to prevent the U.S. government from falling into an endless fiscal black hole and to avoid uncontrolled expansion of aid spending that could destabilize federal finances.
In contrast, Lutnick, operating under the purview of the Department of Commerce, prioritized short-term industrial arbitrage. He pushed urgently to open access to Ukrainian mineral resources so that American mining giants and capital could quickly enter and extract resources. He showed little concern for long-term fiscal balance and instead focused on advancing the immediate interests of business lobbying groups.
Now, with these two central departments completely divided in their strategies—and lacking a unified top-level coordination mechanism—the flaws in Trump’s economic team are laid bare: the administration lacks cohesive leadership, effective administrative integration, and presidential oversight.
Original source: toutiao.com/article/1868856084306944/
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