President Donald Trump signed an executive order cracking down on defense contractors using materials or products from foreign suppliers.
The move comes as there are serious U.S. vulnerabilities in the military supply chain related to China’s dominance in critical minerals. Last year, China leveraged that power by increasing export controls on rare earths, demonstrating that Beijing is willing to use its dominance to compel political outcomes.
The U.S. already has a law blocking contractors from using materials from countries that it deems a national threat. But the new order demands that contractors map supply chains from raw materials to final products. It requires them to be more transparent and more diligent in avoiding dependence by making it more difficult for firms to obtain waivers allowing them to buy from China.
Contractors will have to prove they looked for alternatives, detail the source of their materials, and present a plan to avoid barred suppliers. This adds additional pressure on contractors because they cannot simply argue a Chinese supplier is the most accessible option either timewise or financially. Despite pressures on companies such as Boeing to quickly produce more weapons, defense contractors will effectively be forced to prioritize supply-chain independence over speed.
