On July 20, 2026, US President Donald Trump signed an executive order requiring major arms manufacturers to trace their multi-tier supply chains and actively phase out Chinese rare earth minerals. This move aims to end years of dependence on inexpensive Chinese rare earths critical to defence production.

The order significantly tightens the conditions under which the US Department of Defence can grant waivers for defence-critical imports from China, Russia, Iran, and North Korea. These imports include “covered materials” such as rare earth magnets, gallium, and germanium.

Industry observers characterize the directive as a long-overdue enforcement measure designed to cause short-term difficulties for contractors but yield long-term national security benefits. US analysts acknowledge that while contractors face immediate challenges in requalifying suppliers and sourcing non-Chinese alternatives, the market adjustments are manageable. However, delivery schedules for future military hardware may experience slight delays.

Experts also warn that achieving true strategic independence will require sustained, long-term capital investment in non-Chinese midstream processing facilities.

Sources

South China Morning Post World, "Pain or gain? US moves to decouple its defence industry from China’s rare earths," Alyssa Chen, August 1, 2026. Read more