For years, defense contractors have operated under a law that was supposed to keep Chinese, Russian, North Korean and Iranian materials out of American weapons system — but real-world implementation has been elusive. President Donald Trump’s July 20 executive order, “Securing America’s Defense Supply Chains and Ensuring Domestic Acquisition of Critical Materials,” is a serious attempt to close the gap between what the statute says and what the Pentagon actually enforces.
The order correctly identifies the problem, and makes meaningful progress on the solutions.
The underlying law, 10 U.S.C. 4872, already bars the Department of Defense from buying samarium-cobalt and neodymium-iron-boron magnets, tungsten, tantalum and molybdenum from covered nations, with germanium and gallium set to join the list in December 2027. But the statute also built in wide waiver authorities: If compliant material wasn’t available in the right quality, quantity, or at a reasonable price, the Pentagon could simply approve an exception. In practice, that discretion overwhelmed the rule itself. The devil is in the waivers.
That’s not entirely contractors’ fault. The fact that China is the only viable source for many of these minerals is, well, the problem — so it’s no surprise that defense manufacturers have struggled to source alternatives. Processing capacity concentrated overseas over decades, domestic mining and refining capacity never developed to scale, and qualifying a new source for use in a weapons system can take years even when the material exists. Furthermore, defense demand alone cannot stand up domestic mineral supply chains — the buying power of the commercial sector is necessary, and with the exception of a few automakers, most of the broader industrial base has not been incentivized to decouple their supply chains from China.
Faced with that reality, waivers became the path of least resistance, and few contractors invested in alternative sources. Furthermore, research shows that only 6 percent of defense primes have mapped their supply chains, and it’s not hard to see the challenges of diversifying away from a risk you are not even aware of. Our organization has been calling on the Pentagon to prioritize transparency of its supply chains to address this knowledge gap.
The new executive order does not eliminate waivers, but it limits their usage and ensures that if issued, they will still support the administration’s broader strategy. Starting January 1, 2027, the Secretary of Defense may only approve a waiver if a contractor documents exhaustive efforts to find compliant material and submits an accepted mitigation plan. This plan must identify the noncompliant source, prove compliant material genuinely wasn’t available, lay out concrete steps to remove that material from the supply chain and commit to a strict timeline for doing it.
Failure to qualify a domestic source no longer counts as an excuse unless the contractor can show active, funded efforts to qualify one. Now, to get a waiver, you have to show your homework and waivers become transition tools, not permanent escape hatches.
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The order pairs that rule with a second, broader requirement: Supply-chain visibility becomes a contractual obligation, rather than a best practice. Contractors at every tier will have to submit a complete indentured bill of materials tracing every component back to the origin of its raw materials, and to screen their suppliers for financial distress, foreign ownership or control and manufacturing risk. That reaches well beyond the handful of sensitive materials named in the statute — a recognition that the vulnerabilities Beijing could exploit next are not necessarily the ones already on a restricted list.
There’s a third piece that is as important as the crackdown on waivers: a reinforcement of other minerals policies. The order exempts sourcing through Project Vault and any project financed or backed by EXIM, DFC, the Pentagon, the Departments of Commerce, Energy, etc. The purpose here is to marry defense procurement with the billions Washington has spent developing alternative critical minerals projects abroad and at home. None of that government spending matters if defense contractors have no reason to buy from the producers it created. Success of domestic critical minerals projects begins and ends with demand, and this order is the clearest signal yet that federally backed supply and Pentagon demand are meant to connect.
The path towards compliance will be arduous. The regulations that will actually define “critical supply chain,” set the format of the bill of materials and determine how the Pentagon weighs a mapping exercise against a waiver request are still 90 to 180 days out. Getting them right means they need to be workable for small businesses and new entrants, not just the largest prime — and the Pentagon will need to actually use its new enforcement tools to move the ball forward.
Still, the direction is correct. Combined with the government’s growing willingness to underwrite domestic production, this order treats critical minerals the way the Pentagon treats every other input to military readiness: as something too important to leave to chance, or to a waiver.
Abigail Hunter is Executive Director of SAFE’s Center for Critical Minerals Strategy. SAFE is a nonpartisan energy security and national security organization based in Washington.
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