US moves to tighten defense supply-chain rules for critical materials

The United States is moving to make it harder for defense contractors to receive waivers allowing them to use critical minerals and other sensitive materials from China and certain other foreign suppliers, under an order President Donald Trump signed Monday.

Starting in January 2027, companies seeking waivers to acquire sensitive materials from "non-allied foreign nations" will have to show they made exhaustive efforts to find compliant materials or prove that none was available, the order said. The source said such nations generally refer to China, North Korea, Russia and Iran.

China is the world's largest producer and refiner of rare earths. Rare earths are used in high-tech products including electric vehicles and missile guidance systems.

White House trade adviser Peter Navarro told reporters that contractors would also have to describe steps to remove non-compliant sensitive materials from defense supply chains and provide a timeline for doing so. At present, some rare earth magnets from countries such as China can be bought for defense supply chains with a waiver.

The order also directs the defense secretary to require contractors and subcontractors to map important supply chains with national security implications. The order said guidance for those requirements should be issued within six months.

David Copley, the White House senior director of global supply chains, said in a statement that the United States cannot dominate the modern battlefield if the Department of War does not know where its critical materials, components and software come from. Navarro said the measure was not paperwork but "battlefield preparation".