Will a free trade agreement with the US help Ukraine and what risks could it create?

The idea of concluding a free trade agreement (FTA) with the United States has never been a priority for Ukraine. Nevertheless, from time to time this topic has been raised, albeit without any tangible results.

This time, however, the idea has not only re-emerged in the information space but also has fairly strong chances of being implemented. President Volodymyr Zelenskyy has proposed creating such an FTA with zero tariffs as part of a broader agreement with the United States on Ukraine’s economic recovery.

Given that the volume of Ukraine’s exports to the US is not particularly large, and considering the question of whether such an agreement could become problematic in the context of Ukraine’s accession to the EU, read in the article by Veronika Movchan of the Institute for Economic Research and Policy Consulting: An agreement full of questions: does Ukraine need free trade with the United States?

At present, the United States applies "new" tariffs to Ukraine at a rate of 10%, which is the minimum level in effect for countries that did not have a trade surplus in goods with the US prior to 2025.

In addition, Ukrainian goods are subject to special additional duties, particularly on ferrous metals and products made from them.

The United States is Ukraine’s fifth most important export destination after the EU, Türkiye, China and Egypt; however, exports to the US account for only about 3% of Ukraine’s total exports.

Moreover, the export structure is highly concentrated and consists mainly of metallurgical products. In particular, pig iron accounted for 53% of exports in the first nine months of 2025, while pipes made up 9%. Furthermore, Ukraine shipped 80% of its total pig iron exports to the United States, meaning that redirecting these supplies elsewhere is almost impossible.

Prospects for a rapid and substantial increase in exports from this sector are uncertain due to the impact of the full-scale war. At the same time, entering the US market with new products would require investment and time, resources Ukraine may not have.

Another major challenge is related to Ukraine’s intention to become a member of the European Union.

The EU is, among other things, a customs union, which implies a common trade policy toward all third countries, including the United States.

It is difficult to say how the EU views Ukraine’s intention to conclude an FTA with the US during accession negotiations. Formally, Ukraine would be required to abandon such negotiations.

The existence of such agreements also creates additional challenges after accession.

At the same time, this idea emerged as part of a broader package of arrangements with the US on reconstruction. The European Union is actively involved in this process and is interested in Ukraine’s rapid economic recovery, as this would reduce the EU’s own financial burdens.

Therefore, it is likely that at the stage of preparing a potential US-Ukraine FTA, the US and the EU would try to agree on rules of origin and a control system to prevent abuses of such an agreement, so that it would not have to be cancelled after Ukraine acquires EU membership.

However, it is not clear whether this is legally feasible, and, more importantly, whether the additional resources required to create and maintain such safeguards would be worth the expected benefits.

Especially given that it is unclear why the United States would abolish tariffs for Ukraine in the first place.

Duty-free treatment for investment goods can already be obtained through investment incentive programmes that the Ukrainian government can grant unilaterally, including within the framework of potential agreements on special economic zones.

And imports of energy products, another component of US exports, are already duty-free.

For these reasons, many questions about this initiative remain unanswered.