The Trump administration has declared a national emergency that effectively prohibits Chinese batteries from being installed in grid-scale energy storage systems, according to an executive order issued in late August. The directive, reported by MIT Technology Review in its September 10 climate newsletter, comes as the US energy storage market hits record expansion rates — growth that's been driven largely by inexpensive Chinese battery technology. The order marks the most aggressive move yet in a years-long campaign to sever American dependence on Chinese battery supply chains, even as the country races to stabilize its electric grid and reduce carbon emissions.
The executive order prohibits installation of "any foreign-produced bulk-power system electric equipment" that presents a national security threat, specifically targeting battery energy storage systems along with inverters and transformers. New rules require that 55% of materials used in energy storage projects must originate outside China and other restricted nations starting in 2026, or those projects lose eligibility for tax credits. Import duties on batteries jumped to 25% in January from an earlier 7.5%. The restrictions build on policies from the 2022 Inflation Reduction Act, which limited where battery minerals could be extracted, processed, or recycled, and where batteries and their parts could be manufactured. Those tax incentives were revised in 2025, but the Trump administration has maintained similar restrictions.
"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 lead at Benchmark Mineral Intelligence, quoted in the newsletter. Analysis from BloombergNEF suggests the move will slow deployment of grid-connected storage projects in the short term as developers await detailed guidance from the Department of Energy, expected by year's end. Some projects may need to locate alternative cell sources — whether made domestically or imported from other nations — which will likely cost more than Chinese imports, according to Isshu Kikuma, an energy storage analyst at BloombergNEF. "Worst case, those projects could get canceled," he notes.
The newsletter explains that while the US could eventually meet its own battery demand, domestic production capacity won't fully satisfy requirements until sometime in the 2030s, even though manufacturing capacity might technically exist around 2030. New plants from LG Energy Solutions, Samsung SDI, Ford, and SK On are scheduled to launch or scale up by next year. In an unexpected development, a weakening electric vehicle market is actually helping, as some facilities originally built for car batteries are switching to produce cells for grid storage instead. But this shift carries a price: batteries manufactured in the US remain substantially more costly than Chinese-made alternatives, and even sourcing from countries like South Korea would likely mean higher expenses.
The newsletter frames the dispute as part of a broader challenge that extends beyond American borders and beyond batteries alone. China has built a commanding lead in technologies like solar panels and batteries through years of government backing and manufacturing expertise, making it an energy powerhouse. The world now faces a delicate political calculation: take advantage of cheap, available technology that can dramatically lower emissions and energy costs, or accept the risks that come with depending too heavily on a single supplier for critical infrastructure. The ban technically applies even to existing energy storage facilities, though they're unlikely to be shut down based on their batteries' origin — since most current plants use Chinese batteries, strict enforcement would essentially strip most installed battery storage from the American grid. The trade-off between affordable clean energy and supply chain independence will shape not just American policy but global climate strategy as nations weigh short-term deployment speed against long-term industrial autonomy. Policymakers face a choice with no easy answer: slower decarbonization now, or vulnerability later.