"What we need to do is commit to companies to say, ‘Look, how are you going to go ahead and resolve this problem through friendshoring, through domestic shoring, through changes in suppliers?'" Michael Cadenazzi said on the sidelines of the Farnborough Airshow, offering the Pentagon's willingness to negotiate timelines so long as contractors present credible plans. His comments came amid industry alarm over a new executive order that presses the defense supply chain to break dependencies on certain foreign sources by the start of 2027.
The Executive Order and its deadlines
The White House executive order gives firms until the start of 2027 to stop using critical materials and minerals from Russia, Iran, North Korea and — most notably — China. It directs the Defense Secretary, Pete Hegseth, to produce policy and implementation guidance within six months that will require all prime contractors and subcontractors to map and trace "all components, parts, equipment, software, and materials back to the origin of raw materials in their supply chains." The Pentagon will then examine those mapped supply chains for "vulnerabilities, bottlenecks, and single points of failure" to assess national security risk.
The order states: "The United States must secure its supply chains against physical, cyber, and economic subversion," and sets the policy that both finished military equipment and the critical materials to manufacture, maintain, sustain, and repair that equipment "are sourced domestically or from allied nations." It also instructs the department to stop issuing waivers that have allowed U.S. firms to buy from prohibited countries as of Jan. 1, 2027 — unless a prime contractor submits an acceptable, "formal" mitigation plan.
Michael Cadenazzi: conditional flexibility at Farnborough
Cadenazzi, the assistant secretary of defense for industrial base policy, emphasized the department's readiness to work "in the near term" with contractors who show a plan to bridge gaps. "And if there’s a gap, a legitimate gap, [and] you have a plan and you need a window to see you through [to] bridge that gap, that’s what we want to know," he said. He underlined the department's focus: "it's about the plan, it's about the mitigation plan for the long haul."
He framed the approach as a bilateral one: the Pentagon will press for friendshoring and domestic shoring where feasible, but expects companies to propose concrete mitigation steps and acceptable timelines to reach compliance.
Aerospace Industries Association and Eric Fanning: capacity and timing concerns
The Aerospace Industries Association warned the EO could "impede" efforts to strengthen supply. AIA said that "for several of the minerals identified, domestic sources either do not exist today, or the US lacks the capacity, scale, or purity requirements needed to meet demand," and suggested more workable alternatives to avoid disruptions to national defense support.
Eric Fanning, AIA's president and former Army secretary, told Breaking Defense that dependency on China developed over decades and that the EO creates "an unrealistically tight time frame without a lot of exceptions allowed." He argued the defense industry alone does not create enough demand to draw private capital to build domestic supply and called for a government-industry partnership with government investment to make domestic production viable.
Courtney Weatherby and the processing 'black box'
Courtney Weatherby, deputy director at the Stimson Center for Southeast Asia and energy, water and sustainability programs, warned that mapping will likely hit technical and practical barriers. Her research into mining and processing in Southeast Asia and China finds that minerals mined in one country are often shipped to China for processing and mixed with outputs from multiple sources, creating what she called a "black box" of provenance data.
Weatherby said companies may be able to trace back to intermediate firms but will struggle at refining or processing points where original sources are commingled. She and Fanning both predicted the EO could raise costs for defense firms as they shift away from Chinese processing, noting China’s lower labor costs and existing processing infrastructure that would need replicating elsewhere.
What this means for prime contractors, the Pentagon, and domestic mineral producers
- Prime contractors: They must map and trace supply chains, prepare formal mitigation plans to avoid losing waivers after Jan. 1, 2027, and be prepared to demonstrate good-faith efforts to the Pentagon. Expect practical obstacles in tracing processed minerals.
- The Pentagon: The department has six months to craft policy and will score contractor submissions against mapped vulnerabilities and mitigation plans. Cadenazzi signaled a readiness to grant temporary, plan-backed windows while the department and allies ramp up alternatives.
- Domestic mineral producers and processors: Building capacity, purity standards and processing infrastructure will demand time and government investment. The article notes recent months have seen the administration pursue rare earth deals and loans, and that the Pentagon took an equity stake in MP Minerals last year as part of broader efforts to shore up domestic capabilities.
The executive order sets a firm horizon and a heavy operational task: six months for policy, broad tracing requirements, and a Jan. 1, 2027 cutoff for routine waivers. The department's public posture is conciliatory — willing to "have that conversation" with firms that show credible bridges — but the industry warnings are clear: sourcing, processing and market realities will not be solved overnight. The coming months, and the mitigation plans contractors submit, will determine whether the order tightens supply-chain security without fracturing the defense industrial base.
