EO Restricts Imports of Foreign Power Grid Gear
A new executive order directs the Secretary of Energy to prohibit the import and installation of certain bulk-power system electrical equipment from China and other designated foreign adversaries, citing national security risks.
President Trump issued Executive Order 14421 on August 26, 2026, targeting national security threats to the U.S. power grid. The order authorizes the Secretary of Energy to prohibit U.S. persons from acquiring, importing, or installing bulk-power system equipment—such as transformers, inverters, and control systems—designed or supplied by entities controlled by or subject to the jurisdiction of foreign adversaries, including China and Russia.
The order creates significant uncertainty for energy project developers, suppliers, and contractors who rely on global supply chains. While it imposes no immediate obligations until the Department of Energy issues implementing regulations, which are due by December 24, 2026, it signals a major shift in procurement policy for critical infrastructure. The forthcoming rules may also impose conditions on the continued use of previously installed equipment from covered suppliers.
Counsel should advise clients in the energy sector to immediately assess their supply chains to identify equipment sourced from covered nations. Parties negotiating procurement, construction, and offtake agreements should consider adding contractual protections, such as revised force majeure and change-in-law clauses, to mitigate risks from potential supply disruptions and cost increases.