2 months ago
- The Jones Act, passed in 1920, requires all domestic water shipments to use US-built, US-owned, and US-crewed vessels.
- Trump issued a temporary waiver for energy-related products and fertilizer to ease supply chain issues and lower oil prices.
- The law provides concentrated benefits for US shipbuilders and shipowners but imposes diffuse costs on consumers through higher shipping prices.
- Its national defense rationale is outdated; US oceangoing shipbuilding has declined dramatically despite the law.
- High costs and lack of competition have reduced domestic waterborne trade and encouraged reliance on foreign imports.
- The waiver has shown benefits: increased domestic oil supply, fertilizer availability, and better supply chains for territories like Puerto Rico.
- Hawaii, Alaska, and Puerto Rico suffer disproportionately from high shipping costs under the Jones Act.
- Most Americans are unaware of the law's impact, but the waiver highlights its inefficiencies.
- Reforms such as exempting overseas territories or allowing allied-built ships with US crews could improve the situation.