U.S. defense contractors seek second DFARS delay as Pentagon’s $200B ‘Deal Team Six’ mobilizes for rare earth independence
Major US defense contractors are lobbying the Trump administration to postpone the January 1, 2027 enforcement of DFARS 252.225-7052, according to a mid-May Financial Times report. The regulation, finalized in 2024, bans the use of samarium-cobalt (SmCo) and neodymium-iron-boron (NdFeB) magnets in defense contracts if any production stage from mining through fabrication occurred in China, Russia, Iran, or North Korea.
Contractors argue that a substantial supply gap remains because no Western alternative has yet scaled to required volumes, while China’s April 2025 export controls have put NdFeB and SmCo magnets under a strict case-by-case licensing regime, disrupting transitional supply. The January 2027 date already reflects a one-year extension from an original 2026 target.
