President Donald Trump on Monday signed an executive order aimed at securing the country's defense supply chain and access to critical minerals as the U.S. grapples with China's stranglehold on manufacturing and processing of rare earths needed for everything from semiconductors to weapons.
The order calls on the Defense Department to tighten defense-related supply chains and gain better visibility deeper into the tiers of suppliers for components -- everything from minerals and magnets to chemicals and forgings -- to identify those coming from foreign suppliers like China, North Korea, Russia and Iran. The order also calls for limiting waivers to those using critical minerals from "unreliable foreign" suppliers, instead encouraging domestic defense contractors to supplies at home or from allies.
"American cannot dominate the modern battlefield if the Department of War doesn't know where its critical materials, components, and software come from," a senior administration official said in a briefing with reporters.
The order comes as the administration has ramped up efforts to break China's stranglehold on the mining and processing of rare earths needed for defense and autos -- something Beijing has been able to use as a leverage point in recent U.S.-China trade negotiations and in a tiff with Japan. China has also taken steps to push its own companies to source locally, much like the order is pushing U.S. companies to do with their supply chains.
"China is practicing a starve, not strangle, strategy -- not just with America but with rest of the world," said Peter Navarro, director of the Office of Trade and Manufacturing Policy at the White House. "The idea is that they slow down things enough, blame it on bureaucracy to send a message that if the world doesn't kowtow to them, bad things will happen. But we are moving at warp speed on critical minerals."
Navarro cited new technologies and a recent partnership between Vulcan Elements and ReElement Technologies to build a domestic rare earth magnet supply chain in the U.S. as part of efforts under way to reduce reliance on Chinese sources for defense, aerospace, and artificial-intelligence infrastructure.
The administration has struck to close to 150 deals, deploying tens of billions of dollars and hiring 400 "deal guys" from the private sector to move faster to shore up minerals and other critical supply chains, according to a senior administration official during the briefing.
Despite the efforts, analysts think it could be a couple of years before the U.S. is able to meaningfully reduce its reliance on China for a handful of critical rare-earth inputs.
That likely means rare-earth access will be a continued point of contention between the two rivals. Beijing earlier this month put 10 U.S. companies, including MP Materials and USA Rare Earths, on a list that restricts exports to them -- a move they said was in response to several Chinese companies, including Alibaba, being added to a Defense Department list of Chinese military companies operating in the U.S. Alibaba sued demanding its removal from the list, arguing it has no military affiliations.
Write to Reshma Kapadia at reshma.kapadia@barrons.com
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July 20, 2026 16:47 ET (20:47 GMT)
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