Trump's Grid Security Order Could Backfire on America's AI Boom
Oil Prices Jump 2% on Saudi Attacks as OPEC Sees Demand Rebound Rystad Energy is an independent energy consulting services and business intelligence provider offering global databases, strategic advisory and research products for energy companies and suppliers,… A White House executive order designed to secure the US power grid from Chinese-made equipment is more likely to disrupt battery storage supply chains than the transformers and switchgear it aims to target, according to new Rystad Energy analysis.
Executive Order 14421, signed by President Donald Trump on 26 August 2026, names substation transformers, grid-connected inverters, battery energy storage systems, high-voltage circuit breakers and generation turbines as covered equipment.
Rystad Energy finds that US reliance on Chinese transformers and inverters has already fallen substantially, leaving limited practical exposure in those categories.
However, battery storage paints a more vulnerable picture: China supplied 50% of US lithium-ion battery imports by value in the 12 months to June 2026, and no alternative origin comes close to matching that scale.
The order explicitly names the growth of data centers and artificial intelligence as the reason a supply disruption now carries national security consequences.
The order is written around the grid, but the supply chain problem it creates falls most squarely on battery storage.
Transformers and breakers have low Chinese import exposure today because the market shifted before this order arrived.
Battery storage has not made that transition yet, and there is no alternative origin that can absorb a 50% Chinese share at the volumes data centers and AI infrastructure now require.
Geoffrey Hebertson, Senior Analyst, Renewables and Power For transformers and high-voltage circuit breakers, the order arrives after the market has largely already moved.
China supplied just 3% of US transformer imports and under 1% of breaker imports by value in the 12 months to June 2026.
South Korea, Mexico and Canada collectively account for 74% of breaker imports and 48% of transformers.
Hyosung Heavy Industries disclosed $285.3 billion of ultra-high-voltage transformer contracts with two US hyperscalers on 15 September, confirming that Korean suppliers are winning on the strength of their US manufacturing plants rather than on the order’s exclusions alone.
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