By Jarrett Renshaw
WASHINGTON, July 20 (Reuters) - President Donald Trump on Monday signed an executive order making it harder for U.S. defense contractors to obtain waivers allowing them to buy critical minerals and other materials from China and other prohibited foreign suppliers, the administration's latest effort to reduce reliance on overseas supply chains for weapons production.
The new rules mean defense contractors will have to do much more than simply show that a Chinese supplier is the easiest
or cheapest option.
Companies seeking a waiver will need to prove they searched for alternatives, explain where their materials come from and lay out a plan to move away from prohibited suppliers. Contractors will face the loss of contracts if they don’t prove they are doing enough to source domestically.
"No more: 'we tried nothing and we're out of options'," White House adviser Peter Navarro told reporters during a briefing before the executive order was released.
The order comes as the Pentagon pushes defense contractors like Lockheed Martin and Boeing to rapidly expand weapons production while facing persistent vulnerabilities in the supply chains that feed the U.S. military.
Many critical minerals and processed materials used in missiles, aircraft and other advanced systems still rely on Chinese suppliers, leaving companies caught between demands to move away from Beijing and the need to keep weapons flowing to U.S. forces and allies.
Beyond tightening waiver requirements, the executive order directs the Pentagon to come up with rules that require contractors to map critical defense supply chains from raw materials through finished military products.
Companies will be required to identify the origins of minerals, components, software and other inputs used in designated weapons systems, extending government visibility beyond prime contractors to lower-tier suppliers.
"This is not paperwork. It is battlefield preparation," Navarro said, arguing the Pentagon needs to know whether missile systems or other military platforms depend on foreign-controlled suppliers before a conflict begins.
The order also requires contractors to assess suppliers for foreign ownership, financial vulnerability and manufacturing risks, and to replace suppliers deemed unreliable.
(Reporting by Jarrett Renshaw; Editing by Michelle Nichols)
