Anastasia Boden is the director of constitutional scholarship at the Pacific Legal Foundation.
Pain at the pump doesn’t sell well, and the White House knows it. As the war in Iran has sent oil prices soaring, the Trump administration has reportedly located what could be considered a quintessential “America first” fix: issuing 30-day waivers to the Jones Act, a century-old law that has been hiking your energy bills for decades. A better route would be to deep-six it for good.
Formally known as the Merchant Marine Act of 1920, the statute requires any ship moving cargo between two U.S. ports to be built, owned, registered and crewed by Americans. What sounds patriotic on paper has proved a disaster in practice. The World Economic Forum has labeled it the most restrictive cabotage law in the world. Worse: It doesn’t work. The Jones Act has shrunk the American shipping industry. Without foreign competition, U.S. shipbuilders have had no incentive to keep costs down. The Congressional Research Service has found that American-built ships can now cost six to eight times as much as equivalent vessels built in foreign yards.
The economics are simple: When vessels are that expensive, American shippers buy fewer of them. The Transportation Department counted 92 oceangoing Jones Act-compliant vessels as of 2024 — a 52 percent decline since 2000. Meanwhile, more than 60,000 commercial ships operate globally.
That collapse has real consequences for your energy bills. With so few compliant ships, Jones Act carriers can charge rates up to 10 times as high as other ships running similar routes. That isn’t a market premium for superior service — it’s a captivity tax. American oil producers in Texas can’t load a competitively priced foreign tanker and send fuel to refiners in New Jersey or heating oil to New England. They have to use the small, expensive, aging fleet of Jones Act ships. If those vessels aren’t available, producers have to turn to trucks and trains: slower, pricier alternatives that the U.S. Maritime Administration estimates contribute to traffic congestion costing $200 billion per year.
The problem is most acute in places that cannot easily fall back on roads or rails. Consider Hawaii, which is almost entirely dependent on petroleum imports for its electricity generation. Thanks to the Jones Act, transporting fuel to the state is extraordinarily expensive. Hawaiian consumers pay the highest electricity rates in the U.S. — nearly double the national average.
It’s much the same in Puerto Rico. There is currently no Jones Act-compliant liquefied natural gas tanker in the American fleet — meaning the island, a U.S. territory, cannot buy LNG from American sources. The Dominican Republic, next door and not subject to the Jones Act, has no such problem.
Another victim is Alaska — where oil pumped on American soil faces a restricted and expensive path to the lower 48 states. The result is that moving domestic energy within the U.S. is often harder and more expensive than moving it internationally.
The original logic behind the law was well intentioned. After World War I, Congress wanted to ensure the U.S. maintained a strong merchant fleet. In wartime, the thinking went, we’d want plenty of American ships and sailors ready to mobilize. Yet as my organization, the Pacific Legal Foundation, has documented, the law has delivered the opposite. Instead of a thriving shipbuilding sector, the country has a handful of aging vessels kept afloat by the absence of competition. Of the 99 U.S. oceangoing vessels counted in 2019, 30 were at least 25 years old.
Foreign-policy officials have repeatedly cited the act as an obstacle to efficient military operations. “I can’t afford a lot of $600 million ships,” Navy Secretary Richard Spencer said in 2019, highlighting the Jones Act’s inflationary effect on domestic building.
There’s another matter: The law is blatantly illegal. The Constitution’s port preference clause prohibits Congress from favoring the ports of one state over another. Yet that’s exactly what the Jones Act does by encouraging international businesses to bypass Hawaiian and Alaskan ports. It also increases costs for Hawaiian and Alaskan businesses whose competitors can rely on cheaper, land-based options. Our client, the Koloa Rum Company, is a case in point. The Hawaii-based company pays nearly double for imported materials compared with competitors in the lower 48 states and nearly triple the shipping costs due to Jones Act routing requirements.
The Trump administration is expected to issue 30-day waivers to allow foreign vessels to help move fuel from Gulf Coast producers to East Coast refiners. That’s a sensible emergency measure. Letting the market work — even temporarily — would help easy a supply crunch.
Yet the Jones Act isn’t merely a problem during wars and crises. It frustrates American business every day and quietly bloats your heating, electricity and gas bills. A hundred-year-old protectionist law that has demonstrably failed at its goal of building a strong American merchant fleet, while making energy more expensive, deserves more than a temporary waiver. It ought to be scuttled.
The post Three cheers for scuttling the Jones Act appeared first on Washington Post.
