The Jones Act Is a Failure
The Jones Act Is a Failure
When a law is routinely waived, it’s a pretty good sign that it doesn’t make sense in the first place.
Consider the Merchant Marine Act of 1920, more commonly known as the Jones Act. In the name of “national security,” it requires that no goods be transported between two U.S. seaports unless the ship carrying them was built by a U.S. company, flies the U.S. flag, is owned by U.S. citizens, and is crewed exclusively by Americans. The law’s chief proponent — the domestic maritime industry, if you can imagine — claims that the Jones Act ensures an ample pool of all-American ships, ready to respond to any national emergency.
How is that working out? The Trump administration announced Wednesday that it was waiving the Jones Act’s requirements for 60 days to ease supply-chain disruptions. White House Press Secretary Karoline Leavitt explained the decision in a statement:
President Trump’s decision to issue a 60-day Jones Act waiver is just another step to mitigate the short-term disruptions to the oil market as the U.S. military continues meeting the objectives of Operation Epic Fury. 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.
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.
If the Jones Act is so essential for the United States to respond to wars and national emergencies, one would assume it wouldn’t be waived when there are wars or national emergencies.
The obvious problem is that the Jones Act, by design, restricts the transport of critical goods across the country. When Puerto Rico needs fuel after its electric grid has been smashed, or when regular shipping patterns are disrupted by conflict, the law prevents the vast majority of the world’s vessels from moving needed supplies from one part of America to another.
But the Jones Act was supposed to secure a reliable supply of U.S.-built and manned ships to help in a crisis. Where are all those vessels?
It turns out there aren’t that many of them. As of 2024, the country boasts just 92 ships that comply with the Jones Act. Another 93 ships carry the American flag and are crewed by U.S. citizens, but they were built in foreign countries. Those ships are free to move cargo between Los Angeles and Shanghai, but not between New York and Miami.
Energy supplies are especially vulnerable to the law because they depend on even scarcer tanker ships. Colin Grabow of the Cato Institute notes, “Of nearly 7,500 oil tankers worldwide, just 54 comply with the Jones Act. Of those, only 43 are product tankers suited to transporting refined fuels,” such as gasoline and diesel.
Such a limited fleet means that Jones Act–compliant ships are often unable to respond to major disruptions or emergencies. Foreign-built and operated ships could fill the gap, but they are barred from doing so without a waiver. Rational presidents are usually persuaded to buck the powerful maritime lobby and suspend the law once a crisis becomes acute.
The root of the Jones Act’s failure is that it privileges American shipbuilding over American shipping, denying traders access to far cheaper vessels constructed abroad. “By preventing Americans from using foreign-built ships to conduct domestic commerce,” Grabow relates, “the law provides U.S. shipbuilders with a captive market. These U.S.-built ships, however, are vastly more expensive than those produced overseas.”
Protectionism’s high prices “limit the demand for ships, raise the cost of transporting cargo, and consequently make waterborne transport a less attractive option for moving goods.” Therefore, the domestic shipping industry is much smaller than it otherwise would be, so “fewer ships are available to serve the needs of the U.S. economy and to respond effectively to national emergency.”
Waiving the Jones Act to aid energy consumers now is the least the government can do. But Californians shouldn’t be able to buy gasoline from Texas or Louisiana only when a war breaks out and the Jones Act temporarily goes away.
Foreign vessels pose no danger when delivering billions of dollars’ worth of merchandise from Europe or Asia every day; they wouldn’t harm anyone transporting goods from one U.S. port to another, either.
More importantly, the Jones Act prevents America from having the ships it needs to respond to crises by hobbling its domestic shipping industry. That reality — not international competition — is the true threat to national security.
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