WASHINGTON — President Donald Trump issued an executive order titled Securing America’s Defense Supply Chains and Ensuring Domestic Acquisition of Critical Materials on July 20. The directive strengthens restrictions on Pentagon procurement of critical materials and imposes new supply chain transparency and waiver requirements.

The order builds upon existing statutory frameworks, specifically 10 U.S.C. 4872, which bars the Department of Defense from buying samarium-cobalt magnets, neodymium-iron-boron magnets, tungsten, tantalum, and molybdenum from covered nations. Germanium and gallium are set to be added to the list of barred materials under this statute in December 2027. While the law currently allows the Pentagon to approve waivers if compliant material is not available in the right quality, quantity, or at a reasonable price, the new executive order tightens these exceptions.

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 mitigation plan required for a waiver must identify the noncompliant source, prove compliant material was not available, lay out steps to remove the material from the supply chain, and commit to a strict timeline. Failure to qualify a domestic source is not a valid excuse for a waiver unless the contractor shows active, funded efforts to qualify one.

To enforce these standards, contractors at every tier will be required to submit a complete indentured bill of materials tracing every component back to the origin of its raw materials. Contractors will also be required to screen their suppliers for financial distress, foreign ownership or control, and manufacturing risk. These requirements address a documented gap in industry visibility, as research shows that only 6 percent of defense primes have mapped their supply chains.

The executive order exempts sourcing through Project Vault and projects financed or backed by EXIM, DFC, the Pentagon, the Department of Commerce, and the Department of Energy. Regulations defining "critical supply chain," setting the format of the bill of materials, and determining how the Pentagon weighs mapping exercises against waiver requests are expected within 90 to 180 days. "The devil was in the waivers," Abigail Hunter, Executive Director, said in a published report regarding the regulatory landscape.