US Bulk-Power Equipment Import Restrictions Could Deepen Transformer Supply Shortages

A recent U.S. executive order restricting the import of certain bulk-power equipment from designated countries could affect more than $22 billion worth of imports recorded since 2025, potentially adding further pressure to an already constrained power equipment supply chain, according to a recent analysis by Wood Mackenzie.

The order is expected to potentially affect 24 countries, with China likely to face the largest impact. Wood Mackenzie said China has accounted for almost all bulk-power equipment imports into the U.S. since the beginning of 2025, making the country the primary focus of the new restrictions.

The restrictions come as the U.S. power equipment market is already facing supply shortages. Wood Mackenzie estimates that power transformers are experiencing a 15% market shortage, while substations face an estimated 8% shortage in 2026. Limiting access to Chinese-manufactured equipment could further intensify procurement and lead-time challenges for utilities and other large power consumers.

The 100 MVA and above power transformer segment is expected to be particularly affected. Demand for power transformers rated above 10 MVA has expanded by nearly 300% since 2020, with the 100 MVA segment recording significant growth since 2023.

Ben Boucher, Principal Analyst, Supply Chain at Wood Mackenzie, said utilities have largely been avoiding Chinese suppliers since the introduction of the first bulk-power equipment restrictions. However, data centers could face greater exposure, as some have turned to Chinese manufacturers to reduce equipment lead times amid rising electricity demand from new data center developments.

Wood Mackenzie noted that the 100 MVA-plus transformer segment is already experiencing some of the most acute shortages, while data centers have increasingly relied on Chinese suppliers to manage delivery timelines.

However, the ultimate impact of the executive order remains uncertain, as the precise definition and scope of “bulk power” and its application to data center loads have yet to be fully clarified. The U.S. Department of Energy is expected to interpret and implement the rules over the next 120 days, which could determine the extent of the restrictions and their impact on the power equipment supply chain.