According to www.manufacturingdive.com, President Donald Trump signed an executive order on Monday, July 15, 2026, limiting defense contractors’ ability to obtain waivers for sourcing critical minerals and components from foreign entities of concern—including China and Russia.
Waiver Restrictions Take Effect January 1, 2027
The order mandates that, beginning January 1, 2027, the Secretary of Defense and military service heads will cease issuing waivers for parts or critical minerals made or processed by foreign entities of concern. This aligns with statutory prohibitions under the strategic materials law, which bars the Department of Defense (DOD) from acquiring aircraft, weapons, ships, and tanks containing components originating from countries such as Russia. The law also prohibits the DOD and its contractors from using specialty metals not processed or manufactured in the United States.
The directive grants limited waiver authority only for national security–urgent items, those with severely constrained sources, or materials otherwise difficult to procure. However, waivers are no longer automatic: contractors must demonstrate verifiable expenditures toward identifying domestically sourced alternatives. The DOD is required to submit a comprehensive report to the National Security Advisor within six months detailing implementation metrics and remedial actions taken by companies.
Mitigation Plans and Supply Chain Mapping
Defense contractors must now develop formal mitigation plans identifying all materials required by law without waiver eligibility. These plans must document every effort to source compliant components, outline concrete steps to remove non-compliant materials from supply chains, and establish strict, enforceable timelines for full compliance. Contractors are further directed to map each component’s end-to-end supply chain—tracing back to raw material origin—and conduct rigorous risk assessments of all suppliers and subcontractors, including financial stability and exposure to foreign entities of concern.
The DOD must also establish guidelines for supply chain mapping and vulnerability identification before purchasing critical electronic devices. Stockpile legislation reviews are required prior to any waiver decision, with explicit verification of domestic availability—or lack thereof—built into the approval process.
Implementation Challenges and Industry Response
While some industry participants welcome the mandate, others warn of operational strain. Brett Veliocovich, co-founder of drone maker Powerus, told Manufacturing Dive:
“Every year, they’re making it more and more difficult, which is good. We got to get that back. Everyone needs a shock to the system to fix that in there.” — Brett Veliocovich, co-founder of Powerus
In contrast, the Aerospace Industries Association (AIA) cautioned that domestic capacity gaps could impede progress. Its spokesperson stated the mandate will “impede reaching these goals” because U.S. sources either “do not exist” or fail to meet required scale, capacity, or purity standards. The AIA advocated for “more workable approaches that will advance supply chain security and avoid unnecessary disruptions” on firms supporting national defense.
Greg Williams, director of the Center for Defense Information at the Project On Government Oversight, emphasized implementation asymmetry:
“But it’s also placing a great deal of responsibility on the shoulders of the individual contractors to make those minerals available, and I’m not sure they have the capacity to do that.” — Greg Williams, director of the Center for Defense Information, Project On Government Oversight
He noted that eliminating inputs from certain foreign suppliers will inevitably affect cost, quality, and lead time—and may force trade-offs like reduced battery life or less powerful electric motors.
Broader Legislative and Strategic Context
The executive order mirrors provisions in the National Defense Authorization Act (NDAA) for fiscal year 2026, which strengthens domestic manufacturing across the U.S. defense industrial base. Under the NDAA, the DOD will be prohibited from purchasing batteries for weapons and support systems made with materials from foreign entities of concern—including China and Russia—starting January 1, 2028. This builds on the DOD’s Acquisition Transformation Strategy, released in November 2025, which aims to accelerate production capacity for key systems, weapons, and munitions while prioritizing allies and partners.
The policy also carries enforcement teeth: contractors found guilty of fraud, misrepresentation, or intentional failure to implement mitigation plans face remedial action—including potential referral to the Department of Justice. Contract modification or termination may follow if alternative U.S.- or allied-sourced materials cannot be identified and deployed.
Source: manufacturingdive.com
Compiled from international media by the SCI.AI editorial team.
