Supporters of the federal maritime regulation known as the Jones Act argue that the potential threat from Chinese expansion makes these protectionist policies necessary. They claim that without the Act, Chinese ships would dominate U.S. shipping lanes. However, recent developments suggest that updating the Jones Act might offer benefits to American businesses and citizens.
Established in 1920, the Jones Act mandates that goods transported between U.S. ports must be on ships that are American-flagged, built, and mostly crewed and owned by Americans. Yet, since March 17, the law has been temporarily suspended for fuel and fertilizer shipments. Initially, President Trump waived these regulations for 60 days, citing national security concerns related to Iran. The waiver was extended twice for an additional 90 days each, the second extension with stricter conditions and a narrower list of eligible fuels and fertilizers.
This waiver period has shown how the Jones Act constraints have impacted domestic shipping. As of September 17, 200 ships have completed 259 voyages under the waiver to deliver gas, oil, and other goods across the U.S. These trips were previously inhibited by the Jones Act.
“Surprisingly, only seven voyages under the waiver, less than 3%, were by ships from a Chinese company.”
Half of these voyages involved ships from companies in Denmark, Greece, Japan, and Singapore. About 20% were by shipping companies from Switzerland, Monaco, and other countries. Even U.S. companies with ships failing to meet Jones Act criteria reaped benefits, facilitating 25% of the waiver shipments.
These waivers have granted U.S. businesses, consumers, and farmers greater access to domestic products. Notably, nine shipments of the fertilizer component anhydrous ammonia moved between Gulf Coast ports. Such movements were impossible under the Jones Act due to the lack of suitable tankers.
Puerto Rico, during this time, received bulk propane shipments not feasible before. Hawaii benefitted too, with fuel shipped from Houston in May and additional deliveries from the Gulf Coast in July, along with a propane shipment that met over half of its annual demand.
The waiver period demonstrates that U.S. companies opt for more local products when relieved from Jones Act restrictions. Despite this, supporters of the Jones Act caution that changing the law could boost Chinese influence at the expense of U.S. interests. Yet, the waiver data and other indicators doubt this claim. For example, Hawaii often receives goods via ships exempt from the Jones Act and owned by companies in Japan, Singapore, and Greece, with only 7% arriving on Chinese or Hong Kong ships.
In contrast, the U.S. Virgin Islands, never subject to the Jones Act, see U.S. goods mainly delivered by U.S.-based Crowley and Tropical Shipping. Hence, internal U.S. shipping beyond Jones Act rules isn’t dominated by Chinese firms.
Rather than employing China to justify maintaining the current situation, lawmakers could enhance security by permitting domestic shipping using ships linked with U.S. allies. This strategy would broaden transportation choices and strengthen ties with European and East Asian partners.
With the waiver set to expire on November 15, there’s an opportunity for Congress and President Trump to consider reforms to favor American interests effectively.
Jonathan Helton is a policy analyst at the Grassroot Institute of Hawaii.
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