U.S. Power Equipment Emergency: "Impact Expected to Exceed Trump's First Term" [Click e Stock]

Hana Securities: "Stronger Than the 2020 Measure"

Regarding U.S. President Donald Trump declaring a national emergency for the power grid and signing an executive order to regulate foreign-made power equipment, Hana Securities forecasted on the 31st that this measure will have a much stronger effect than it did during his first term. Hana Securities did not provide specific target prices or investment opinions on individual stocks.

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On the 26th, President Trump declared a National Emergency and signed Executive Order 14420 to regulate foreign-made power equipment.

Previously, on July 28, the Federal Communications Commission (FCC) had newly added foreign-made power inverters to its Covered List, blocking new entries. The latest executive order has now expanded the scope of regulation to bulk power systems—large-scale transmission network facilities that exchange electricity between regions.

Unlike the FCC regulations, the new order can be retroactively applied to already installed equipment. The reasoning is that digital backdoors could be remotely embedded in foreign-made bulk power systems, posing a potential threat, and continued dependence on foreign equipment increases supply chain vulnerabilities.

The range of regulated items is extensive, covering transformers, capacitors, battery energy storage systems (BESS), and uninterruptible power supply (UPS) units. While facilities used for regional distribution are excluded, facilities and control systems necessary for operating interconnected transmission networks, as well as transmission lines of 69 kilovolts (kV) or higher, are included.

Relays, transformers, utility-grade inverters, BESS, UPS units, generators, and distributed control systems used in substations, control rooms, and power plants all fall within the scope. If the U.S. Secretary of Energy determines that the manufacturer of certain equipment is owned or controlled by a foreign entity designated as a risk country, or assesses the equipment to pose hacking or national security risks, then the transaction of such equipment will be banned. Risk countries are expected to include China, Russia, Iraq, Venezuela, and others.

During his first term on May 1, 2020, President Trump issued a similar executive order (13920) based on the same legal grounds.

Sihyeon Kim, a researcher at Hana Securities, noted, “This executive order expands the range of regulated targets to include inverters, batteries, and software, and goes beyond merely preparing recommendations for equipment already installed—it grants the authority to order replacement or removal, making it significantly stronger.” The 2020 order ended without substantial effect after President Biden's inauguration in January 2021.

Although detailed enforcement rules for the current executive order are expected to be announced within 120 days, uncertainty remains. However, since President Trump’s term has more than two years remaining, Researcher Kim believes this measure will yield more concrete results than during the first term. Kim added, “Supply chain restructuring driven by national security interests is gradually expanding beyond defense and communications into the realm of power infrastructure.”

This content was produced with the assistance of AI translation services.