August 26, 2026 | By Keith Martin in Washington, DC
President Trump issued an emergency executive order this afternoon that bans "any acquisition, importation, transfer, or installation” of foreign-produced transformers, inverters, circuit breakers and other electrical equipment that can be used to sabotage US power plants and the electricity grid.
The affected equipment is broadly defined.
However, the equipment must be tied to suppliers and service providers with ties to any of 24 countries. The countries -- apart from China for a wide range of equipment, Ethiopia for solar cells and Russia for enriched uranium -- are not typical suppliers to the power industry.
The order applies to transactions "initiated" after August 26, 2026.
However, transactions are not barred until the Department of Energy determines that the equipment involved poses a risk of sabotage, unauthorized access, malicious remote action or supply disruption to the US electricity grid or otherwise "poses an unacceptable risk" to US national security.
The Department of Energy has 120 days -- until Christmas Eve -- to publish rules to implement the order.
However, it is supposed to identify the equipment about which the US government is concerned and make recommendations about ways to "isolate, monitor, or replace" affected equipment to the National Security Council staff at the White House "as soon as practicable."
DOE may decide to issue a white list of pre-qualified equipment and vendors. It may also set up a process to issue licenses to power companies that want to use sensitive equipment.
It may decide to impose conditions on continued use of equipment acquired or installed before the order was issued. It could order equipment already in use to be isolated, monitored or removed. The order suggests it will consider phasing in any such action so as not interrupt essential services.
The order can be found here.
Equipment
It covers foreign-produced equipment used in "facilities and control systems necessary for operating" the utility grid. Transmission lines of 69 KV or greater voltage are considered part of the grid.
It also covers equipment used in power plants and other generating facilities "needed to maintain electric system reliability." President Trump has maintained that wind and solar facilities are too intermittent to help with reliability.
The order does not apply to distributed energy facilities and equipment that comes in contact solely with local distribution lines.
The following equipment is potentially affected if it is foreign-produced by companies with ties to one of the covered countries:
items used in bulk-power system substations, control rooms, or power generating stations, including reactors; capacitors; substation transformers; utility-scale and grid-connected inverters; battery energy storage systems; and uninterruptible power supply systems supporting critical infrastructure, current coupling capacitors, large generators, small generators, backup generators, substation voltage regulators, shunt capacitor equipment, automatic circuit reclosers, instrument transformers, coupling capacity voltage transformers, protective relaying, metering equipment, high voltage circuit breakers, generation turbines, industrial control systems (including remote terminal units, programmable logic controllers, and intelligent electronic devices), distributed control systems, and safety instrument systems.
The government may also take action to bar use of software and firmware.
Countries
The countries at which the order is aimed are the 24 countries currently on US arms embargo and sanctions lists under the International Traffic in Arms regulations.
The most prominent is China.
The other countries are Afghanistan, Belarus, Congo, Central African Republic, Cuba, Cyprus (through September 30, 2026), Eritrea, Ethiopia, Haiti, Iran, Myanmar, Iraq, Lebanon, Libya, Nicaragua, North Korea, Russia, Somalia, South Sudan, Sudan, Syria, Venezuela and Zimbabwe.
Any entity controlled by or subject to the legal jurisdiction of one of the 24 countries is a "Covered Foreign Entity."
To be barred, a transaction must not only involve covered equipment, but the equipment must also have been "designed, developed, manufactured, or supplied" by a company or person "owned by, controlled by, or subject to the direction of a Covered Foreign Entity."
The administration is considering a similar ban on Chinese equipment used in data centers.
The sheer complexity of juggling so many different sets of new rules -- FEOC, domestic content, section 45X tax credits for US manufacturing, the foreign inverter ban, multiple kinds of tariffs, minimum import prices on polysilicon products, expanded reporting obligations under a beefed-up AFIDA regime and now a new set of definitions tied to bulk-power system equipment -- is a growing challenge for any form of inbound foreign commerce.
Market Reaction
This is the second attempt by the Trump administration to ban use of equipment that might be used to harm the US utility grid.
An earlier bulk-system power order on May 1, 2020 made it illegal immediately to acquire, import or install transmission and electric generating equipment supplied by companies in any country that the US considers a foreign adversary. The earlier order was unclear about what exactly was illegal and was never fully implemented. (For earlier coverage, see here and here).
Trump officials went out of their way in calls to industry trade associations and interviews soon after the earlier order to downplay concerns that equipment might have to be ripped out and replaced. A list of frequently-asked questions posted to the DOE website on the heels of the earlier order said, "As of today, no equipment is prohibited . . . . As such, any immediate steps by owners or operators would not only be premature, but may be unnecessary."
Some tax equity investors and lenders moved quickly to require developers to fund any future costs to replace equipment that the government decides is a threat to the grid. Such provisions remain in many financing documents.
Some construction lenders started requiring developers to do cyber-security audits to help show that projects are following best practices in case of government scrutiny.
The earlier order triggered a modest pullback in the short term from Chinese equipment, especially for equipment like transformers and batteries that are closer to the grid than other equipment like solar panels.
The US deputy energy secretary at the time said that the Federal Energy Regulatory Commission was working on a plan to compensate utilities that must remove equipment considered a national security risk.
The assistant energy secretary in charge of implementing the earlier order said it would take the government five months to work out a pre-qualification process.
President Biden suspended the earlier order for 90 days upon taking office in early 2021 and never ultimately reinstated it. However, both the Trump and Biden administrations agreed about the pressing need to harden the US power grid against cyberattacks from foreign adversaries.