US President Donald Trump on Monday signed an executive order aimed at reducing dependence on China for defence-related critical minerals, directing military contractors to shift away from Beijing-linked supply chains beginning in January 2027.
Without naming China, Trump’s executive order stresses the need to maintain US military dominance “in an era of renewed great power competition”.
“The United States must secure its supply chains against physical, cyber, and economic subversion,” it said.
The US Department of Defence relies heavily on critical minerals, including rare earths, for components used in its weapon systems.
China accounts for roughly two-thirds of global rare earth mining and about 90 per cent of refining, giving Beijing significant leverage over the supply chain.
The executive order, called “Securing America’s Defence Supply Chains and Ensuring Domestic Acquisition of Critical Minerals”, directs military contractors to submit “formal mitigation” plans to identify non-compliant sources, document exhaustive efforts to find compliant material or prove none was available, and lay out steps to remove non-compliant sources from their supply chains.
The executive action also directs the US Secretary of Defence Pete Hegseth to “develop policy and implementation guidance” within 180 days on requiring contractors to map critical supply chains for national security acquisitions identified by the Pentagon, from raw materials to the end products delivered to the military.
The order defines contractors as all tiers of suppliers and subcontractors providing goods, materials, systems, software or services critical to fulfilling contracts.
“China is practising what I call a starve-not-strangle strategy, not just with America but with the rest of the world,” said Peter Navarro, the White House senior counsellor for trade and manufacturing.
“The idea is that they slow down things enough, blame it on their bureaucracy to send the message that if the world doesn’t kowtow to them, bad things will happen.”
In a statement to the South China Morning Post, the Chinese embassy in Washington rejected Navarro’s accusations, saying Beijing does not “use economic and trade ties or industrial cooperation as a means of coercion”.
“The US side should abandon the Cold War mentality, stop politicising economic and trade issues and refrain from using ‘supply chain security’ as a pretext for protectionism, bloc confrontation, or actions that undermine the stability of global industrial and supply chains,” said Liu Chang, the embassy spokesman.
The order comes a month after China placed two leading US rare earth companies – MP Materials and USA Rare Earth – along with eight other American firms on its export control list, while barring 46 US companies from government procurement.
The rules banned exporters from supplying dual-use goods to the 10 companies and extended the restriction to any organisation or individual worldwide that transfers China-origin dual-use items to them, underscoring the measure’s extraterritorial scope.
China’s measures were in direct response to the Pentagon’s blacklisting of dozens of Chinese companies – including Alibaba, Baidu and BYD – as “Chinese military companies operating in the United States”.
In early July, Alibaba secured a temporary relief from a California court allowing it to resume lobbying in the US, days after it sued the US Department of Defence, arguing that it was added to the Pentagon’s list without substantial evidence or explanation.
Alibaba owns the South China Morning Post.
The tit-for-tat measures marked one of the sharpest escalations since Washington and Beijing reached a temporary rare earth truce in Busan last October, an understanding that Trump and Chinese President Xi Jinping reaffirmed during their summit in Beijing in May.
The agreement in Busan followed months of negotiations after China imposed export controls in April in retaliation for US tariffs, disrupting global supply chains and forcing factory shutdowns around the world.
China holds a near-monopoly on rare earth processing, particularly heavy rare earths – a group of 17 critical elements used to produce the high-performance magnets found in defence systems, robotics and electric vehicles.
According to a 2025 report by the US-China Economic and Security Review Commission, 78 per cent of components used in US Department of Defence weapons systems contain critical minerals sourced from China.
The report found the US Navy to be the most exposed of the six military services, with nearly 92 per cent of its weapons systems affected.
China’s continued use of export controls has added fresh urgency to global efforts to diversify away from its supply chains, with Washington investing billions of dollars in domestic and overseas projects to reduce reliance on Beijing.
