The Patriot Post® · End the Jones Act for Good

The White House announced that, due to Iran’s military efforts to shut down the Strait of Hormuz to shipping as Tehran’s Islamic regime desperately responds to the U.S. and Israel’s joint operation to eliminate Iran’s nuclear and missile threat, President Donald Trump is waiving the Jones Act for 60 days.

As White House Press Secretary Karoline Leavitt explained in a statement, “This action will allow vital resources like oil, natural gas, fertilizer, and coal to flow freely to U.S. ports for sixty days, and the Administration remains committed to continuing to strengthen our critical supply chains.”

Clearly, Trump aims to mitigate the spike in global oil prices that hit Americans hard at the gas pump. And if they remain high for too long, it will likely spell doom for Republicans’ chances of retaining control of the House in the midterm elections and could even swing the Senate toward the Democrats.

However, regardless of Trump’s current rationale for temporarily waiving the Jones Act, the law passed in 1920 has been problematic from the outset and has repeatedly served as an example of why protectionist legislation rarely produces the result it was supposedly intended to achieve.

The intent of the Jones Act was to protect the U.S. shipbuilding industry under the guise of national security interests. What the law actually did was protect the interests of American shipbuilders against those of the American shipping industry. The law serves as a classic example of the government putting its thumb on the scales of the free market in service to special interests.

The Jones Act itself bans the shipping of goods between U.S. ports unless they are on American-built, American-owned ships that fly the U.S. flag and are crewed by Americans. The logic behind the legislation was that it would ensure that the U.S. shipbuilding industry was protected and would continue to provide vessels for America, especially in times of war or national emergencies.

The irony is that the Jones Act has produced the exact opposite effect. “Of nearly 7,500 oil tankers worldwide, just 54 comply with the Jones Act,” the Cato Institute’s Colin Grabow observes. “Of those, only 43 are product tankers suited to transporting refined fuels.”

Indeed, more often than not, when the U.S. has faced a war or national emergency, administrations have responded by suspending the Jones Act to meet the demands posed by the situation.

The editorial board of National Review notes:

This is a routine practice. It was waived in 2021 after a cyberattack shut down the Colonial Pipeline, blocking the flow of oil to the Eastern Seaboard. It was waived in 2017 when Hurricanes Harvey and Irma hit the southern United States, and again when Hurricane Maria ravaged Puerto Rico. It was waived after Hurricane Sandy in 2012 and Katrina in 2005. It has been waived several times “in the interest of national defense,” in preparation for WWII, in response to the 1991 Gulf War, and during the 2011 war in Libya.

What good is a law that produces the exact opposite result of its purported intended rationale and has to be waived as a matter of routine? Is that not the primary tell that the law in question is bad?

In fact, rather than protecting the American shipbuilding industry, the Jones Act has created an environment that is slowly killing it. Meanwhile, the American shipping industry has continued to grow, as competition has spurred innovation and rapid development and expansion.

Grabow further notes, “The law provides U.S. shipbuilders with a captive market. These U.S.-built ships, however, are vastly more expensive than those produced overseas.” To put this in perspective, the average cost of a U.S.-built tanker is $170 million more than that of a South Korean-built one.

Furthermore, this law imposes hundreds of millions of dollars in unnecessary costs on American consumers that would be avoided if it were repealed. In light of this reality, Senator Mike Lee (R-UT) and Representative Tom McClintock (R-CA) have introduced legislation to repeal this bad law.

Ending the Jones Act would not merely save Americans from unnecessary shipping costs; it may also help improve the American shipbuilding industry by allowing competition again.