The Jones Act of 1920 is a federal law requiring that goods shipped between U.S. ports be transported on ships that are U.S.-built, -owned, -flagged, and -crewed. It aims to support the domestic maritime industry. The law has had bipartisan support over the years with Democrats arguing it protects union jobs and Republicans arguing it was essential for national security. Most movement conservatives and free-market think tanks and pundits have opposed it.
Due to the oil supply disruption resulting from the war with Iran, President Trump has suspended enforcement of the Jones Act for 60 days. This will not replace lost oil but will remove a roadblock to supply chain bottlenecks. This was a wise thing to do, but it runs counter to Trump's protectionist instincts. Maybe after sixty days without it, even Trump will realize America would be better off without it.
I was pleased to see the Washington Post editorialize approvingly today that Trump’s 60-day suspension of the Jones Act may be the beginning of the end of this protectionist law. Portions are excerpted below:
The beginning of the end of the Jones Act
Editorial Board, The Washington Post, March 19, 2026- ...The law was supposed to encourage more domestic shipbuilding. But outside of mobilization during the world wars, commercial shipbuilding has not been one of America’s strong suits for 150 years, despite — or perhaps because of — near constant protectionism since the founding of the country.
The Jones Act has not made U.S. shipbuilding strong. .... Today, the Jones Act protects industry segments that hardly exist. Only 54 of the world’s roughly 7,500 oil tankers meet the law’s requirements. The sole U.S.-flagged liquefied natural gas tanker has to operate under an exemption because it was foreign-built. Not one of the world’s oceangoing dry bulk carriers — used to transport ore, fertilizer and agricultural products — are Jones Act compliant. ... The Jones Act vessels that do exist are primarily engaged in trade between the U.S. mainland and Hawaii, Alaska and Puerto Rico. The Americans who live in those places pay higher transportation costs ... Repeal would save U.S. consumers $769 million per year on petroleum alone, .. (read it all)
In addition to the above piece from the Washington Post, The Wall Street Journal, and a lot of other news outlets approvingly editorialized on Trump's decision to temporarily suspend the act, although they did not address the merits of total repeal or substantial reform of the act. For a much more detailed explanation of what is wrong with the Jones Act, I suggest this piece from the Mercatus Center. Also see the Hoover Institute piece, How The Jones Act Harms America, or CATO's Latest Waiver Is Another Indictment of the Jones Act.
If you support the Jones Act because you think it is essential for national security, you can read a rebuttal of that argument in some of the sources above. If you support it because you want to protect jobs from market forces and increased efficiency, I do not share that value, and we will just have to disagree. That is the same argument buggy whip makers made against the introduction of the automobile.
In addition to the obvious arguments against the Jones Act, it is a significant contributor to increased greenhouse gases and roadway congestion. Since all produce between American ships must be carried by American ships, a foreign ship cannot unload part of a load in Boston and then move on to Baltimore and unload more. So, as a result, tractor-trailer trucks transport goods between Boston and Baltimore. This is replicated across the nation. This makes no sense.
Top Stories
Posts
No comments:
Post a Comment