A Crucial Defense Against China Is About to Shut Down

MP Materials , which mines rare earth elements from the Mountain Pass mine in California, received support from the federal government in July through the Defense Production Act. (Joe Buglewicz/Bloomberg)

About the author: Dr. Laura Taylor-Kale is a senior fellow at the Council on Foreign Relations. She served as the first assistant secretary of defense for industrial base policy in the Department of Defense from 2023-25. She has held senior positions in the Department of Commerce, the Department of State, and the World Bank.

Congress is dangerously close to killing one of its most powerful tools for countering China’s manipulation of the critical minerals and rare earth trade.

The Defense Production Act allows the government to incentivize production of and private investment in key materials needed for defense. It is set to expire on Sept. 30. Unless Congress passes a bill that reauthorizes the DPA by then, it will end. The military, private industry, investors, and ultimately, the American people will lose.

Its reauthorization should be routine. Since enacted in 1950, Congress has reauthorized the law more than 50 times.

Tucked under the authority of Congress’s banking and financial services committees, the DPA originally had broad scope over economic activity during the Korean War. It has since evolved into an economic security tool with expansive power over supply chain resilience, emergency preparedness, allied coordination, foreign investment, and defense industry consolidation. Congress uses it regularly to provide grants, set price floors, and make purchase commitments that incentivize manufacturing for defense.

And yet, friction between committees in Congress may hold up its on-time reauthorization. The Senate Banking and House Financial Services Committees are the authorizers of DPA, although the House and Senate Armed Services Committees are most interested in its renewal. Reauthorization is now in limbo, and that is bad for national security.

Letting the DPA expire would be a costly strategic and tactical mistake. Markets would be disrupted, and preparedness diminished. Just when the U.S. needs concerted action to shore supply chains and counter China’s manipulation of critical minerals and rare earths, Congress is threatening to undermine military and emergency readiness.

Ironically, Congress affirmed the DPA as recently as July, when it allocated $1 billion to the DPA fund in the One Big Beautiful Bill Act. This money could provide a much-needed boost for the president’s aim of increasing domestic production of critical minerals. This summer, the Trump administration used the DPA to provide MP Materials, which operates a rare-earth mine in California, with a price floor for producing rare earth magnets.

If the law expires, the government won’t be able to make new DPA grants or purchase guarantees. That $1 billion will be wasted.

The Pentagon uses DPA daily—more than 400,000 times a year—to proactively mitigate supply chain risks and preserve military readiness. It uses it to prioritize defense contracts when supplies are scarce, including for key missile programs. Letting the DPA expire would unnecessarily disrupt markets, given how frequently the Defense Department uses the law to channel scarce market resources for key defense purchases.

It also helps the U.S. coordinate with allies by allowing the Pentagon to make reciprocal agreements to provide industrial resources and military supplies at all levels of the supply chain. Since its last reauthorization in 2018, the government has signed 17 Security of Supply Arrangements with allies. The government uses the DPA to expedite delivery of military supplies to allies—that has proven instrumental in America’s support for Ukraine.

This matters for civilians, too. The government invokes DPA during national emergencies: It can cover strategic energy production, food for natural disaster survivors and responders, critical infrastructure protection, cyber assets, and scarce health resources. During Covid-19, the Trump and Biden administrations both used the DPA to ensure supplies of meat and poultry, infant formula, face masks, and other personal protection gear.

Efforts to shore up domestic supply chains rightly enjoy bipartisan support. Renewing the DPA law on time would ensure investors, industry and our adversaries that the U.S. prioritizes maintaining its arsenal for economic security, military preparedness, and supply chain resilience. In letting the DPA law perish, Congress effectively issues a sedative just when the U.S. needs a boost. What a shame.

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