Can the US battery market untangle from China?

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The US energy storage market has been hitting deployment records, fueled largely by competitively priced Chinese cells. That trajectory now faces a sharp policy jolt: a late-August 2026 executive order from the Trump administration declared a national emergency and banned installation of 'foreign-produced bulk-power system electric equipment' posing national security risks — explicitly naming battery storage systems, inverters, and transformers. The order is the most aggressive US action yet on battery supply chains. Prior measures included IRA tax credits (2022) that restricted mineral sourcing geography, 2025 legislation requiring 55% of storage project material costs to come from outside China and other restricted countries starting in 2026 to remain credit-eligible, and a tariff hike to 25% on Chinese batteries in January 2026 (up from 7.5%). The executive order goes further by removing the option of absorbing higher costs. Benchmark Mineral Intelligence analyst Shan Tomouk called the outright ban 'a bit of a surprise' that creates concern for domestic players. BloombergNEF analysis expects project delays as developers wait for DOE guidance expected by year-end. Depending on that guidance, some projects will need to find alternative cell sources — but domestic and non-Chinese alternatives remain more expensive and less available. For AI infrastructure teams tracking data center power strategy, this policy shift adds volatility to the energy storage market that underpins grid reliability and UPS planning.