The Trump administration has issued a 60-day partial waiver of the Jones Act in the face of rising worldwide oil prices. Regardless of the merits of Operation Epic Fury and its role in spiking oil prices, this waiver, which allows foreign vessels to ship fuel and fertilizer among U.S. ports, was the right call.
The waiver is a good policy that ought to be extended indefinitely. The Jones Act is protectionist red tape left over from just after World War I. One of Congress’ chief aims when it was signed into law in 1920 was to unload surplus ships from the war effort by requiring that vessels transporting goods from one U.S. port to another must be U.S.-made. Those ships have long since been sold off, and most have been retired.
Yet the made-in-the-USA requirement remains, along with stipulations that the vessels must be flagged as American, crewed by Americans, and have ownership that is at least 75 percent American. However, there simply isn’t a large shipbuilding industry in the U.S. anymore. Its absence is due to the vast difference in costs between the construction of American-made and foreign-made ocean vessels — a gap that often exceeds $100 million per ship.
The number of large ocean-going ships that are Jones Act-compliant has dwindled to fewer than 100 vessels, and even that risks overstating current shipping capacity. There is only one large, nominally Jones Act-compliant tanker to take liquefied natural gas between U.S. ports, for instance, because of some extra sharp lawyering. (The vessel is French-built.)
Union Opposition
Maritime unions opposed this Jones Act waiver. They warned a waiver would “create opportunities for foreign-flag operators that avoid paying U.S. taxes, rely heavily on low-wage labor, and operate under regulatory regimes that circumvent international labor and vessel safety standards,” in a letter to President Donald Trump signed by officers of the AFL-CIO and the Sailors’ Union of the Pacific, among others.
At the same time, the unions asserted, “studies have shown” that domestic shipping has “negligible” effects on “nationwide fuel prices” and that any cost savings would be “unlikely to reach consumers.”
All of which raises the obvious question: Well, which is it? Has the U.S. opened the door to cutthroat competition or will the hire of these vessels prove so expensive that there are no savings to be had in the face of skyrocketing oil prices?
Expensive for Outlying States and Territories
A short analysis by Independent Institute scholar Caleb Petitt last year raises an intriguing additional possibility for what U.S. shippers could do in a pinch: “The U.S. only had 92 Jones Act-compliant ships in 2024. However, there were 185 U.S.-flagged ships that year,” he wrote. “The other 93 are foreign-built ships that have been flagged in the United States.”
Currently, America’s maritime laws “divide the fleet in half,” Petitt explained, with Jones Act-compliant ships engaging in domestic port-to-port transfers and the other vessels shipping items from foreign nations to a single American port.
This makes things extra hard and stupidly expensive for outlying U.S. states and territories such as Hawaii, Alaska, and Puerto Rico. Non-Jones Act compliant vessels cannot simply add these genuine patches of American soil as one stop on the way to or from the mainland. As a result, commercial routes develop that tend to further isolate these already distant lands from the commerce and culture of the continental U.S.
U.S. Customs and Border Protection is charged with implementing the waiver. It would be in keeping with President Trump’s intentions and smart to pull in those U.S.-flagged but not U.S.-built vessels as well.
One point the unions made in their pleading was that Jones Act waivers tend to be granted “only in rare, exceptional circumstances.” They are correct as a matter of protocol, but not of principle. The president has wide latitude to suspend the Jones Act. He must specify a national security interest to do so but does not have to declare a specious emergency.
Outlook
Should President Trump decide to issue a longer or broader waiver, the courts would likely affirm his authority and make quick work of any legal challenges. And Congress may choose to weigh in for good measure. Our elected officials ought to send the antiquated U.S.-made vessel requirement down to Davy Jones’ Locker.
The argument that America needs this Jones Act provision to prop up the domestic shipbuilding industry simply doesn’t hold water when it comes to these larger ocean-going vessels. If this worked, then it would have worked by now. But even with the aid of this supposedly necessary restriction, passed in 1920, America’s Jones Act-compliant ocean fleet is old and dwindling.
Worse, because of the Jones Act, only half of U.S.-flagged ships are even allowed to engage in domestic port-to-port commerce. Most reasonable people confronted with that fact would say that’s nonsensical. It’s a shame that it took a war in the Middle East to bring some much-needed relief.
