Examining the Jones Act: Time for Reform?

Advocates of the Jones Act, a principle of federal maritime law, argue that concerns over Chinese expansion necessitate retaining its protectionist rules. Without it, they claim, Chinese ships could dominate U.S. shipping lanes. However, recent developments suggest that adjusting the Jones Act could benefit Americans nationwide.

The 1920 law requires any vessel transporting goods between U.S. points to be U.S.-flagged, built, and largely owned and crewed by Americans. Since March 17, exceptions have been made for fuel and fertilizer deliveries. Initially, President Trump permitted a 60-day waiver for national security reasons related to Iran. The waiver was extended in June for 90 days and again on August 10, though with more constraints and a restricted list of fuels and fertilizers included.

These waivers have revealed how the Jones Act’s constraints have shaped U.S. shipping patterns. As of September 17, 200 ships utilized the waiver, completing 259 trips with gas, oil, and other commodities, trips otherwise prevented by the Jones Act. Notably, only seven voyages, or less than 3 percent, involved ships owned by a Chinese company.

Instead, 50 percent of these waiver-compliant journeys were handled by ships from Denmark, Greece, Japan, and Singapore by late August. Vessels from countries like Switzerland and Monaco accounted for around 20 percent. U.S.-based companies, despite not fully complying with the Jones Act’s requirements, also took advantage, handling roughly a quarter of the shipments.

The waiver period has enhanced access to U.S.-manufactured goods for companies, consumers, and farmers. For example, nine anhydrous ammonia shipments moved along the Gulf Coast, made possible by the waiver, as no Jones Act liquified petroleum gas tankers exist. This waiver has similarly aided outlying regions like Puerto Rico, facilitating bulk propane shipments otherwise unfeasible. Hawaii also benefited, receiving fuel and propane shipments that met significant demand earlier this year.

The waiver data challenges the notion that Jones Act reform would favor Chinese interests over U.S. ones. Goods imported to Hawaii often ship on vessels from Japan, Singapore, and Greece. Only 7 percent arrive on Chinese or Hong Kong-owned ships. The U.S. Virgin Islands, exempt from the Jones Act, predominantly receives cargo on U.S.-owned ships, such as those from Crowley and Tropical Shipping. This demonstrates that even in the Jones Act’s absence, Chinese competition is not overwhelming.

Rather than using China as a justification to maintain an obsolete policy, lawmakers could mitigate security risks by allowing only allied nations’ ships to engage in domestic trade. This approach would broaden transport options for American enterprises and consumers, strengthening partnerships with European and East Asian allies.

With the current waiver scheduled to expire on November 15, both Congress and President Trump should consider revising the law to better align with American interests.

Jonathan Helton is a policy analyst at the Grassroot Institute of Hawaii.