Trump order effectively bans Chinese batteries from US grid storage

In late August, the Trump administration issued an executive order declaring a national emergency over "foreign-produced bulk-power system electric equipment" that poses a national security risk. The order specifically names battery energy storage systems, along with inverters and transformers, and bans their installation. MIT Technology Review's climate newsletter, The Spark, describes this as effectively banning Chinese batteries from grid-scale energy storage, though the phrase quoted from the order names no country.

The order lands in the middle of a boom. The US is setting records for the growth of its energy storage market, which helps stabilize the grid, improves reliability and cuts emissions by storing power from intermittent sources like wind and solar, and that growth has leaned heavily on cheap Chinese battery cells. The new order follows years of narrower efforts to loosen that reliance. Tax credits under the 2022 Inflation Reduction Act already restricted where a battery's minerals could be mined, processed or recycled, and where the battery itself was assembled; those credits were reworked in 2025. New legislation goes further: starting in 2026, 55% of the cost of materials used in new energy storage projects must come from outside China and other restricted countries for a project to keep its tax credits. Import tariffs on batteries have climbed too, rising to 25% in January from 7.5% before.

Analysts see the outright installation ban as a bigger step than the earlier tax and tariff measures. "An outright ban was a bit of a surprise, and it does create a bit of concern for domestic players in the US," says Shan Tomouk, energy storage and energy lead for Benchmark Mineral Intelligence. BloombergNEF's analysis concludes the move is likely to slow near-term deployment of grid-connected storage projects, as developers wait for clarity: depending on the Department of Energy's detailed guidance, expected by the end of the year, some projects may need to line up alternative cell sources, whether domestic or imported from other countries. Those alternatives will likely cost more than Chinese imports, says BloombergNEF energy storage analyst Isshu Kikuma, who adds: "Worst case, those projects could get canceled." The order technically applies even to plants already operating, though it's unlikely they would be taken offline over their batteries' origin: since most existing plants currently run on Chinese cells, enforcing the order to the letter would mean removing most installed battery storage from the US grid, Kikuma says.

Longer term, the US aims to supply its own battery demand. The country could have enough manufacturing capacity by about 2030, but because some factories may not ramp up to full output, domestic supply won't actually meet demand until later in the 2030s. New factories from LG Energy Solutions, Samsung SDI, Ford and SK On are due to come online or ramp up next year; a slowing EV market has ironically helped, as some plants built for vehicle batteries retool to make cells for grid storage instead. Even so, batteries made in the US remain significantly more expensive than Chinese ones today, and importing from other countries, such as South Korea, would likely cost more as well.

The piece frames the episode as part of a larger dilemma that reaches well beyond batteries or the US: whether to keep using cheap, available technology from a single dominant supplier, or pay more to build independent capacity. China, it notes, is miles ahead of much of the world in both batteries and solar panels, built on years of government support and manufacturing experience, which leaves other countries weighing the savings of cheap imports against the risk of depending on one supplier for a critical energy technology.

Key facts

In late August, the Trump administration issued an executive order declaring a national emergency and banning installation of "foreign-produced bulk-power system electric equipment" that poses a national security risk, specifically naming battery energy storage systems, inverters and transformers.
Starting in 2026, new legislation requires 55% of the material costs of new energy storage projects to come from outside China and other restricted countries to keep their tax credits; battery import tariffs already rose from 7.5% to 25% in January.
BloombergNEF expects the order to slow near-term deployment of grid-connected storage projects, and its analyst Isshu Kikuma says non-Chinese cell sources will likely cost more and that, worst case, some projects could be canceled.
The order technically covers plants already in operation too, but since most installed US battery storage already runs on Chinese cells, literal enforcement would strip most operating storage from the grid, which is why removal of existing plants is considered unlikely.
New factories from LG Energy Solutions, Samsung SDI, Ford and SK On are due online or ramping up next year, and the US could have enough capacity to meet its own battery demand by about 2030, though domestic supply won't actually catch up until later in the 2030s; US-made batteries remain significantly pricier than Chinese ones in the meantime.

Why it matters

This is an escalation, not a new idea. Washington has spent years narrowing Chinese battery makers' access to the US market, through the mineral and assembly sourcing rules in the 2022 Inflation Reduction Act tax credits, their 2025 rework, and tariffs that climbed from 7.5% to 25% in January. An outright installation ban tied to a declared national emergency is a different kind of measure, and it lands squarely on battery storage, which is setting US growth records and lets the grid bank power from wind and solar while improving reliability and cutting emissions. The tension the piece surfaces is not specific to batteries. China's lead in battery and solar manufacturing, built over years of state support and production experience, makes its equipment the cheap option almost everywhere, and cutting off that source trades near-term cost and speed for a longer-term bet on domestic supply.

Who it affects

Developers of grid-scale storage projects face the most immediate uncertainty, since the Department of Energy's detailed guidance is not due until the end of the year and sourcing decisions are hard to plan around until then. Operators of the many existing storage plants that already run on Chinese cells are technically covered by the order too, even though enforcement against them looks unlikely. Domestic manufacturers stand to gain, at least on paper: LG Energy Solutions, Samsung SDI, Ford and SK On all have new or ramping factories due next year, some of them originally built for electric vehicles and now retooling for grid storage as EV demand slows. Analysts tracking the sector are already weighing in: BloombergNEF expects the order to slow near-term deployment, and Benchmark Mineral Intelligence's Shan Tomouk calls the outright ban a surprise that raises concern for domestic players. Further out, anyone relying on the US grid has a stake too: slower battery deployment can mean slower progress on the grid reliability and emissions gains the current storage boom has been delivering.

How to use it

This is a policy story rather than a product one, but it carries a practical implication for anyone planning a US grid storage project: budget for higher costs and wait for clarity before locking in a sourcing plan. The Department of Energy's detailed guidance on the order is due by the end of the year; until then, which cell sources will remain viable is unsettled. Domestically made batteries and non-Chinese imports, such as those from South Korea, both cost more than Chinese cells today, so either path raises project costs. Keeping tax credits also means clearing the new sourcing bar directly: starting in 2026, 55% of a new project's material costs must come from outside China and other restricted countries, on top of the tariffs already in place.

How solid is it

The piece runs in MIT Technology Review's weekly climate newsletter, The Spark, written in the first person, and it names its sources: Shan Tomouk of Benchmark Mineral Intelligence and Isshu Kikuma of BloombergNEF are quoted on the record, and BloombergNEF's analysis is cited by name. The framing that it "essentially bans Chinese batteries" is the article's own reading of the order's practical effect: the phrase it quotes from the order, "foreign-produced bulk-power system electric equipment," names no country. Several specifics are left open in the source itself: which countries beyond China count as "restricted" under the new material rule, the exact cost gap between Chinese and alternative batteries, and how the Department of Energy will implement the order once its guidance lands.

Risks and caveats

Read "essentially bans Chinese batteries" as the article's interpretation, not a quote from the order, whose quoted phrase speaks of "foreign-produced" equipment posing a national security risk. The piece does not say which year the executive order was signed, only "late August," nor which countries besides China count as "restricted" under the new 55% material-sourcing rule. It gives no dollar figures for the cost gap between Chinese and alternative batteries, describing it only as "significantly more expensive," and it does not say whether the tariff rise from 7.5% to 25% in January applies to Chinese batteries specifically or to battery imports in general. The 2030 and "later in the 2030s" domestic-supply timelines, and the "next year" date for new factories, are estimates rather than fixed commitments, and Kikuma's project-cancellation scenario is explicitly framed as a worst case, not a prediction.

“An outright ban was a bit of a surprise, and it does create a bit of concern for domestic players in the US”

— Shan Tomouk, energy storage and energy lead for Benchmark Mineral Intelligence