The rifles were due to be provided to the Philippine police but Duterte said he would look for cheaper alternatives.
"The (rifles) that were ordered already, I am ordering the police to cancel it. We'll just have to look for another source that is cheaper and maybe as durable and as good," Duterte said.
The status of the order had become cloudy over the past week after the Philippine media reported the US government would not deliver the weapons because of concerns about Duterte's war on drugs and other crime, which has claimed more than 4,100 lives in four months.
Since taking office on June 30 Duterte has launched repeated tirades against the United States for criticising his drug war and said he wants to loosen the Philippines' dependence on its former colonial ruler.
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The United States and the Philippines are bound by a mutual defence pact, but Duterte has said he wants to kick out American forces.
On a state visit to Beijing last month he announced the Philippines' "separation" from the United States and declared he was in China's "ideological flow".
But he has continued to launch near- daily criticisms of US colonial rule of the Philippines from 1898-1946, as well as of current American foreign policy.