Honestly, most people think the Defense Production Act (DPA) is some dusty relic from the Korean War that only gets pulled out when we're literally being invaded. That’s just not true anymore.
If you've been following the latest Defense Production Act news, you’ve probably noticed that the government is starting to treat the DPA like a Swiss Army knife for the modern economy. We aren't just talking about tanks and bullets. We’re talking about your electric car's battery, the chips in your phone, and even how much a CEO at a major defense firm gets paid.
Things have changed fast. Especially in 2026.
The Big Shift: No More "Business as Usual" for Contractors
The biggest headline right now is coming straight from the White House. On January 7, 2026, President Trump signed an Executive Order called "Prioritizing the Warfighter in Defense Contracting." It’s a mouthful, but the vibes are clear: the government is tired of waiting for orders that are late and over budget.
Basically, the administration is using the Defense Production Act to put a leash on how big defense companies spend their money. For years, these companies have been doing stock buybacks—basically using extra cash to pump up their own stock price—and paying out huge dividends to shareholders.
The new rule? If you’re a "major defense contractor" and you're underperforming—meaning you’re slow or your tech isn't working—you are forbidden from doing stock buybacks or paying dividends.
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It’s a massive power move. The Secretary of War (formerly Defense) now has the authority to look at a company like Lockheed or Raytheon and say, "You haven't delivered those missiles on time, so you aren't allowed to give your investors a penny until you fix the factory line."
Why this matters to you
You might think, "I don't own a defense company, why do I care?" Well, it signals a shift in how the U.S. views private business. We’re moving away from a "hands-off" approach and toward a "produce or else" model. This affects everything from job security in manufacturing towns to the speed at which new technology actually hits the market.
Critical Minerals: The New Gold Rush
Another huge piece of Defense Production Act news involves stuff you can’t even see. I'm talking about critical minerals like lithium, cobalt, and rare earth elements.
The U.S. is currently terrified of being dependent on China for the materials needed for high-tech magnets and batteries. To fix this, the government is throwing billions of dollars at mining projects right here in America.
- The MP Materials Deal: The Department of War recently executed a $400 million equity investment in MP Materials. This isn't just a loan; the government basically bought a seat at the table to ensure we can separate rare earth elements in California instead of shipping them overseas.
- The "Price Floor" Strategy: This is kinda wild. To encourage companies to mine more, the Pentagon established a price floor for certain oxides (like neodymium-praseodymium). If the market price drops too low, the government pays the difference. It’s like a safety net for miners.
- Expansion of "Minerals": They’ve even expanded the definition of what counts as a "critical mineral" under the DPA to include things like potash (for fertilizer) and gold.
Chips, Chips, and More Chips
We can't talk about the DPA without mentioning semiconductors. While the CHIPS Act gets all the glory, the Defense Production Act is the muscle behind it.
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The government is using DPA Title III to fund "microelectronic commons" hubs across the country. These are basically high-tech playgrounds where small companies can test new chip designs without having to build their own billion-dollar factory.
In late 2025 and early 2026, we saw nearly $160 million injected into these hubs. The goal is simple: make sure the chips used in our F-35s and our smart fridges are made in places like New York and Arizona, not just Taiwan.
The COINS Act and Outbound Money
The 2026 National Defense Authorization Act (NDAA) also introduced the COINS Act. This amends the DPA to give the Treasury Department the power to stop U.S. companies from investing in certain technologies in "countries of concern."
If you're a VC firm in Silicon Valley, you can't just go and fund an AI startup in Beijing anymore. The DPA is now being used to keep American money from building the tech of our competitors.
The Three "Titles" You Should Know
To really get what's happening in the news, you have to understand the three main parts of the DPA. It’s not as boring as it sounds.
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- Title I (Priorities and Allocations): This is the "jump to the front of the line" card. If the government needs 100 engines and Boeing has a private client who wants 100 engines, the government gets theirs first. Period.
- Title III (Expansion of Productive Capacity): This is the "here’s some cash" card. The government gives grants or loans to businesses to build new factories or buy new equipment.
- Title VII (General Provisions): This is the "legal shield" card. It allows companies to coordinate with each other (which usually breaks antitrust laws) if it’s for national defense.
Common Misconceptions About the DPA
"It’s only for wartime."
Nope. Not even close. It was used for fire hoses during wildfires in 2021, baby formula shortages in 2022, and heat pumps for climate goals. In 2026, it's being used as a general tool for "economic security."
"The government just takes over the factory."
It's rarely that dramatic. Usually, it's just about who gets the product first or who gets the funding. It’s more of a partnership (sometimes a forced one) than a total takeover.
"It's only for the military."
As we've seen with the recent focus on minerals and energy, "national defense" is now defined so broadly it covers almost everything. If it affects the economy, the DPA can probably be used for it.
What’s Next? Actionable Steps for 2026
The landscape is shifting. If you're a business owner, an investor, or just someone trying to keep up, here is what you need to do:
- Watch the "Remediation Plans": If you are a contractor, you need to have a plan ready. The 15-day window to respond to "underperformance" notices is incredibly tight. Boards of directors need to be involved now, not later.
- Monitor the DFC: The U.S. International Development Finance Corporation (DFC) is moving its focus from international aid to domestic mining. If you're in the resources sector, that’s where the money is moving.
- Audit Your Supply Chain: The government is looking for "adversarial" components. If your product relies on parts from countries under the COINS Act restrictions, you need to find a domestic or "friend-shored" alternative immediately.
- Review Executive Compensation: If your company does business with the government, expect your bonus structure to be scrutinized. The trend is moving away from "stock price" metrics and toward "on-time delivery" metrics.
The DPA isn't just a law; it's the steering wheel for the American industrial base. As the 2026 regulations continue to roll out, the line between "private business" and "national interest" is going to keep getting thinner.
Stay ahead of it by watching the Federal Register for new "Presidential Determinations." That’s where the real shifts happen before they hit the evening news.