The United States has made foreign-made electrical equipment used in its power grid subject to national security review. U.S. President Donald Trump on the 26th local time declared a national emergency and barred the purchase or installation of foreign-made devices that could threaten security.
The White House said that President Trump signed Executive Order 14420 targeting foreign-made bulk power systems. A bulk power system refers to the entire large-scale transmission network that carries electricity generated at power plants over long distances at high voltage. In the order, Trump wrote, "I find that the circumstances surrounding the supply of foreign-made bulk power system electric equipment constitute an unusual and extraordinary threat."
The executive order is based on the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act. Enacted in 1977, IEEPA allows the president to directly block a specific transaction if the president determines there is an unusual threat to national security.
According to the order, the scope of review broadly covers devices used in everyday power facilities such as substations, control rooms, and generation equipment. Widely used electrical equipment such as transformers, reactors, capacitors, grid-tied inverters, and battery energy storage systems are all subject to review. Large, small, and emergency generators; protective relays; meters; high-voltage breakers; and industrial control systems must also pass review to be used in the U.S. power grid. The order does not stop at the equipment itself but includes software and firmware attached to the devices, remote access functions, and maintenance services within the regulatory scope. However, neighborhood-level distribution equipment that supplies electricity to ordinary dwellings or commercial buildings was not included in the review.
The White House said that when a "particular foreign adversary" designated by the U.S. government holds equity or control over the electrical equipment, it will be identified for national security review. A particular foreign adversary refers to governments of countries subject to U.S. arms embargoes or sanctions, as well as individuals and corporations owned, controlled, or directed by those governments. Counterparties deemed harmful to national security by the U.S. Energy Minister are also included. The White House said in the order that it "focuses on blocking any transaction that is determined to pose significant risks of sabotage, unauthorized access, remote manipulation, or supply disruption," adding that "if it is determined to be capable of having a catastrophic impact on the safety of U.S. infrastructure, the transaction will be blocked."
The executive order does not name any particular country, including China. However, major outlets said the cases the U.S. government has flagged regarding the power grid have largely involved China. Reuters reported that U.S. security experts previously found communication modules not listed in product manuals in China-made solar inverters. If foreign-made electrical equipment has a remote access pathway embedded via communication modules, the manufacturing country or corporations could remotely tamper with U.S. grid equipment. Former Federal Bureau of Investigation (FBI) Director Christopher Wray testified before Congress in 2024 that "adversaries have positioned themselves within U.S. communications networks and the power grid could be a target." Before the U.S. executive order, the European Commission has excluded China-made inverters from energy projects funded with public money starting this year.
The Energy Minister must draft and publish rules to implement the order within 120 days from the 26th, when President Trump signed it. Separately, within 180 days, the administration must outline ways to amend the Federal Acquisition Regulation. The White House said, "Some foreign actors are increasingly creating and exploiting vulnerabilities in the United States' bulk power system," adding, "continued reliance on foreign-made electrical equipment for the bulk power system creates supply chain vulnerabilities for the United States." This is seen as an attempt to prioritize U.S.-made energy infrastructure in future federal procurement reforms. Some expect the Energy Minister to use a pre-qualification system that pre-approves specific devices and specific suppliers.
Trump signed a similar executive order (No. 13920) in 2020 during his first term. At the time, the Energy Department issued an order banning transactions involving China-made equipment, but frontline U.S. power companies continued to complain that the order was difficult to comply with. The order was ultimately suspended under former President Joe Biden's administration for review.
In today's electrical equipment market, U.S.-made products are not keeping up with demand. According to PricewaterhouseCoopers (PwC), lead times for U.S.-made large power transformers have stretched to four years. That means an order placed this year would be delivered in 2030. Prices have risen 80% over the past five years. Hitachi Energy, a Japan-affiliated company, plans to invest $1 billion (about 1.3848 trillion won) to open a plant in South Boston in 2028 to capture this demand. Siemens also plans to invest $421 million (about 583 billion won) in its transformer plant in Charlotte, North Carolina.
Korean corporations are also entering this market. HD Hyundai Electric is expanding its plant in Montgomery, Alabama; Hyosung Heavy Industries in Memphis, Tennessee; and LS Electric in Utah. All three companies have built up backlogs of around five years' worth of orders.