In 2015, the Pentagon quietly signed a waiver. It let Lockheed Martin keep buying a four-dollar magnet from China and bolt it inside the F-35 fighter jet. That is the most expensive weapons program in human history. It was held together by a part you could buy on Alibaba.
I can't stop thinking about this today. Because eight months from now, on January 1, 2027, a law kicks in that bans those Chinese magnets from American weapons. Congress passed it in 2018. It happened during Trump's first term. And right now, with the deadline closing in, the biggest defense companies in America are begging the White House to push it back.
The Financial Times broke the story. Lockheed, RTX, Northrop Grumman, and Boeing are all on the list. All four. They say they cannot meet the deadline. They want more time.
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Here's what worries me. We had eight years. The Pentagon spent $439 million trying to build a magnet supply chain at home. We had eight years of speeches about standing up to China. We had eight years of "Made in America" slogans. And the companies that build our jets and submarines still cannot make a magnet without Beijing.
I don't think most people realize what is inside these weapons. A single F-35 has about 900 pounds of rare earth materials. A Virginia-class submarine has 9,200 pounds. Tomahawk missiles use them. Predator drones use them. All of it does. And almost every ounce comes from China. China controls 90 percent of the world's rare earth processing. They make 93 percent of the magnets. There is no backup. There is no plan B.
I get it. Building a magnet plant is hard. The chemistry is nasty. The mining is worse. China spent thirty years cornering this market while we sent the work overseas. You cannot undo that in a few years. Some experts say it takes five years. Some say ten. Either way we are not close.
But here is the part that put a pit in my stomach. Last April China tightened the valve just a little. They did it to make a point. Ford had to shut down its Chicago plant for a week. That was just a car plant. Now imagine that move during a real crisis. Imagine Xi Jinping picks up the phone the day a fight breaks out over Taiwan. The F-35 line stops. The submarine yard stops. The missile factories stop.
Trump just came back from Beijing. He shook hands with Xi. He smiled for the cameras. But he did not come home with a deal on the special military-grade magnets. Not one. Xi held the card then and he is still holding it today.
So now the new waiver comes. It is the same as 2015. It is the same four-dollar magnet and the same shrug. We will tell ourselves we are buying time. We will tell ourselves the next administration will fix it. We told ourselves that eight years ago too.
Now look at your wallet. Maybe you own Lockheed. Maybe you own RTX or Northrop. Maybe you have a defense fund in your retirement account. The market treats these as safe stocks. They call them bulletproof. This waiver story is not priced in. The supply chain risk is not priced in. Wall Street is still pretending these companies are independent of the country we are preparing to fight.
I am not telling you to sell everything tonight. I am telling you to look. Pull up your brokerage account. See what you own. See how much of it sits inside this mess. Then decide if the price you paid still makes sense.
The number I want you to remember is 9,200 pounds. That is the amount of Chinese rare earth in one American submarine. Say that out loud at the golf course tomorrow. Watch the face of the guy who thinks we are decoupling.
Here is the image I cannot shake. A brand-new F-35 sits on a runway in Texas. The paint is fresh. The flag is on the tail. And tucked deep inside the airframe, behind the wiring and the steel, is a little gray magnet. It was stamped in a factory outside Ganzhou. We built the most advanced fighter in the world. And we filled it with parts from our biggest rival.
"Made in America" was a slogan. It was never a supply chain.
I am going to keep looking into the order books of these defense giants this week. I want to see which ones are hitting production delays first.
More on this tomorrow.
— Lauren
Editor, American Ledger
