Rystad Energy reports that the U.S. has already largely pivoted away from Chinese-made transformers and circuit breakers, rendering the order’s impact on those sectors negligible. China accounted for only 3% of transformer imports and less than 1% of breaker imports in the year ending June 2026. Instead, the market has shifted toward South Korea, Mexico, and Canada, with firms like Hyosung Heavy Industries securing massive contracts to support U.S. hyperscalers.

However, the battery storage landscape remains heavily reliant on Chinese manufacturing, which provided 50% of U.S. lithium-ion imports by value as of mid-2026. Without a viable alternative capable of matching this volume, the tech industry faces a potential bottleneck. The situation hinges on rulemaking due by 24 December 2026. If the Secretary of Energy defines "Covered Foreign Entity" broadly enough to include components or capital originating from China but assembled in third-party countries like South Korea, the very supply chains intended to power AI infrastructure could be rendered non-compliant. Procurement teams at major hyperscalers are now bracing for a scenario where these critical energy systems become legally inaccessible.