Defenders of the Jones Act have lost |
For more than a century, the Jones Act has survived on purported economic and security grounds. Its waiver by the Trump administration for Operation Epic Fury reveals serious flaws in both rationales.
Section 27 of the Merchant Marine Act of 1920, as it’s formally known, requires that goods shipped between U.S. ports travel on vessels that are U.S.-built, U.S.-flagged, U.S.-owned, and crewed predominantly by U.S. citizens. Because of this legally enforced domestic shipping monopoly, building and operating ships in America today costs far more than doing so abroad, and domestic coastwise shipping is effectively nonexistent outside the few places that have no choice, such as Alaska, Hawaii and Puerto Rico.
Rather than bolstering U.S. commercial shipping capacity and the merchant marine, the Jones Act has presided over the steady degradation of both.
Supporters of the law claim it’s essential for national security and has negligible economic costs. They’ve also vigorously opposed waivers of the law, which are permitted in the "interest of national defense," arguing that exemptions undermine economic and national security and are unnecessary due to sufficient domestic capacity. Their efforts to narrow the waiver conditions have, along with vigorous lobbying, successfully ensured they’re rarely met.
President Donald Trump’s most recent waiver of the law has substantially undermined the pro-Jones Act case. Issued for 60 days on March 17 – right after the Strait of Hormuz effectively closed – and subsequently extended for another 90, the waiver covers all U.S. territories and more than 659 product categories. That makes it the longest and broadest waiver since 1950. The law also requires that any operator using the waiver file a compliance report on their activities. Here's what the data........