President Trump orders potential restrictions on certain foreign electric power equipment

On August 26, 2026, President Trump issued Executive Order (EO) 14420, which directs the Department of Energy (DOE) to prohibit or impose mitigation measures on transactions involving certain electric power equipment used in U.S. bulk-power systems (such as transformers, inverters, battery energy storage systems, generators, industrial control systems, and other equipment used in bulk-power substations, control rooms, and generating stations) when that equipment is determined to (1) have been “designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of” a “Covered Foreign Entity” (principally entities linked to China and other countries subject to U.S. arms embargoes), and (2) pose undue or unacceptable risks to the United States or U.S. persons.¹ The EO does not impose any immediate restrictions. The DOE must first publish implementing regulations, which are due within 120 days (December 24, 2026), and develop specific prohibition determinations before taking any enforcement action.

The EO relies on authorities under the International Emergency Economic Powers Act (IEEPA), which empowers the President to regulate various forms of international transactions upon issuing a declaration of national emergency under the National Emergencies Act (NEA). The restrictions will apply to transactions initiated after August 26, 2026, but the DOE also has authority to impose conditions on equipment acquired or installed before that date.

Determination of prohibition and other mitigation measures

The EO authorizes the DOE to prohibit or impose mitigating conditions on transactions involving foreign-produced “bulk-power system electric equipment” (as defined in the EO) when that equipment is linked to certain foreign countries and poses undue or unacceptable national security risks.

Scope of potential actions: The DOE may prohibit transactions in which foreign countries or nationals have an interest; which were initiated after August 26, 2026; and which involve the acquisition, importation, transfer, or installation of any “foreign-produced bulk-power system electric equipment” within U.S. jurisdiction. The prohibitions may be specific to particular transactions or may cover broad classes of transactions.

Determination criteria: To issue a transaction prohibition, the DOE must determine that the transaction:

1. Involves “bulk-power system electric equipment” (“or any critical component, software, firmware, digital service, maintenance service, or remote-access capability associated with such equipment”) that is “designed, developed, manufactured, or supplied by” persons “owned by, controlled by, or subject to the jurisdiction or direction of” a “Covered Foreign Entity.”
2. Poses an undue risk of (a) “sabotage, subversion, unauthorized access, malicious remote action, or supply disruption”; (b) “catastrophic effects on the security or resilience of United States critical infrastructure or the economy of the United States”; or (c) “an unacceptable risk to the national security of the United States or the security and safety of United States persons.”

Potential retroactive effect: Under the determinations, the DOE may also “impose conditions on the continued use, operation, maintenance, servicing, or updating of foreign-manufactured or operated bulk-power system electric equipment” that was acquired or installed before August 26, 2026.

Risk-mitigation alternatives: If the DOE determines to restrict a certain transaction or class of transactions, it may design risk mitigation measures through which otherwise prohibited transactions may be approved by DOE.

Pre-qualification for exceptions: The DOE may also develop lists of pre-qualified equipment and vendors, which would be exempt from any prohibition.

Enforcement: Transactions that evade or avoid, have the purpose of evading or avoiding, or otherwise cause a violation of the EO’s prohibitions, are themselves prohibited under IEEPA authorities. IEEPA violations can carry both civil and criminal penalties.

Definitions of covered equipment and entities

The EO targets the prohibition authority at equipment used in “bulk-power systems,” which are defined as “(i) facilities and control systems necessary for operating an interconnected electric energy transmission network (or any portion thereof); and (ii) electric energy from generation facilities needed to maintain electric system reliability,” including “transmission lines rated at 69,000 volts (69 kV) or more[.]” “Facilities used in the local distribution of electric energy” are excluded from the scope of the authority.

The “electric equipment” used in the “bulk-power systems” includes equipment used in bulk-power system substations, control rooms, or power generating stations, including “reactors; capacitors; substation transformers; utility-scale and other 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 instrumented systems.” The authorities could also extend to any “critical component, software, firmware, digital service, maintenance service, or remote-access capability associated with such equipment” used in the covered types of “electric equipment.”

The “Covered Foreign Entities” to which the covered equipment must be linked are (1) the countries and (2) any persons (natural persons and corporate entities) that are owned by, controlled by, or subject to the jurisdiction or direction of a government of the countries that are subject to an arms embargo under the International Traffic in Arms Regulations (ITAR) at 22 C.F.R. § 126.1 (the most prominent of which is China) or are otherwise determined by the DOE to be engaged in conduct detrimental to the national security or foreign policy of the United States.²

Developing implementing regulations

The actions described in the EO will not take effect immediately. The DOE must first issue implementing regulations and develop specific prohibition determinations before any actions are taken pursuant to the EO. As a result, many of the practical details of the prohibition system are not addressed in the EO and will require further development by the DOE.

The EO’s policy framework and underlying legal authorities resemble those of the Bureau of Industry and Security’s (BIS) Information and Communications Technology and Services (ICTS) Program,³ under which the Department of Commerce has broad authority to prohibit or impose mitigation measures on ICTS transactions that pose undue or unacceptable risks to the United States. The existing ICTS system may serve as a guide for DOE in implementing the new prohibition system.

Determination regulations: To carry out the determinations and implement prohibitions, the EO instructs the DOE to publish rules or regulations within 120 days of the EO (i.e., by December 24, 2026). The EO suggests the regulations could include:

• Lists of particular countries or persons that are Covered Foreign Entities.
• Lists of persons owned by, controlled by, or subject to the jurisdiction or direction of a Covered Foreign Entity.
• Lists of equipment or countries with respect to which transactions involving bulk-power system electric equipment warrant particular scrutiny.
• Procedures to license transactions.

Policy planning: The EO instructs the DOE to, as soon as practicable, begin identifying covered bulk-power system electric equipment for prohibition and to develop policy recommendations for how the government should identify, inventory, isolate, monitor, or replace such items.

Federal Acquisition Regulation (FAR) changes: Within 180 days of the EO (i.e., by February 22, 2027), the DOE must develop recommended revisions to the FAR to (1) ensure that national security risks are adequately considered in federal energy infrastructure procurement and (2) prioritize procurement of U.S.-manufactured equipment. Within 90 days of receiving these recommendations (i.e., by May 23, 2027, at the latest), the FAR Council is instructed to consider proposing amendments to the FAR for public notice and comment based on the DOE recommendations.

The 2020 bulk-power system order

The EO builds on an EO issued during the first Trump administration, in which President Trump authorized the prohibition of the acquisition, importation, or installation of bulk-power system electric equipment supplied by companies owned by, controlled by, or subject to the jurisdiction of foreign adversaries, including China.⁴ The DOE only issued one prohibition under that order. Soon after, President Biden temporarily suspended the order and the single prohibition action was revoked.⁵ 

^{1 Executive Order 14420 of August 26, 2026: “Declaring a National Emergency to Secure the United States Bulk-Power System,” and “President Donald J. Trump Declares a National Emergency to Secure America’s Bulk-Power System,” White House, August 26, 2026.
2 The countries designated under ITAR at 22 C.F.R. § 126.1 are Afghanistan, Belarus, Burma (Myanmar), Central African Republic, China, Cuba, Cyprus, Democratic Republic of the Congo, Eritrea, Ethiopia, Haiti, Iran, Iraq, Lebanon, Libya, Nicaragua, North Korea, Russia, Somalia, South Sudan, Sudan, Syria, Venezuela, and Zimbabwe. The list is subject to change and several of the listings are currently suspended.
3 See the BIS Office of Information and Communications Technology and Services (OICTS) website. The OICTS authorities were originally established during President Trump’s first term through Executive Order 13873 of May 15, 2019: “Securing the Information and Communications Technology and Services Supply Chain,” 84 FR 22689 (May 17, 2019). 
4 Executive Order 13920 of May 1, 2020: “Securing the United States Bulk-Power System,” 85 FR 26595 (May 4, 2020).
5 “Prohibition Order Securing Critical Defense Facilities,” 86 FR 533 (January 6, 2021) and “Revocation of Prohibition Order Securing Critical Defense Facilities,” 86 FR 21308 (April 22, 2021).} 

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