The Jones Act, a century-old shipping restriction, is facing renewed scrutiny as temporary waivers have proven their economic value—and exposed the law's fundamental flaws. Enacted as Section 27 of the Merchant Marine Act of 1920, it requires all cargo moved between U.S. ports to be carried on vessels that are American-built, American-owned, American-flagged, and crewed largely by U.S. citizens. The stated purpose was to maintain a robust domestic shipbuilding industry and a reserve of mariners for national security.
But the reality is starkly different. According to recent data, the United States now produces a negligible share of global shipbuilding tonnage—roughly 0.03 percent—ranking near the bottom among the top 20 shipbuilding nations. Costs for building ships domestically run three to four times higher than overseas. The number of oceangoing vessels eligible under the Jones Act has plummeted from 434 in 1950 to just 93 today, even as the U.S. economy has grown tenfold in real terms. The law, critics argue, has become a subsidy for a handful of shipyards rather than a pillar of national strength.
The economic distortions are particularly severe in the energy sector. It is often cheaper to import refined petroleum from abroad than to ship it from Gulf Coast refineries to the East Coast, thanks to Jones Act restrictions. Similarly, only a single LNG tanker meets the law's requirements, and it is foreign-built with a special exemption for Puerto Rico. As a result, it is effectively illegal to transport American natural gas from the Gulf to New England consumers—an outcome that defies logic and harms energy security.
Recent events have underscored the law's absurdity. In response to rising energy costs linked to tensions with Iran and the Strait of Hormuz blockade, the Trump administration issued a temporary Jones Act waiver in March. That waiver has been extended twice and now runs through Aug. 16, with a third extension under consideration. The waiver has opened domestic shipping routes to a much larger pool of tankers, improving flexibility and resilience in the face of refinery outages or weather disruptions. It has also allowed more efficient crude oil distribution among refineries and helped offset rising crude costs.
Despite these clear benefits, some in Congress—including prominent Republicans—are pushing back against further waivers, illustrating how the Jones Act protects special interests at the expense of the broader economy. Controversies over waiver recipients have only added to the political heat.
Benjamin Zycher, a senior fellow at the American Enterprise Institute, argues that the short-term solution is straightforward: approve a third waiver and commit to more as long as crude prices remain elevated due to Middle East hostilities. The long-term fix, he insists, is outright repeal. “It has never served its ostensible purposes, it creates perverse economic effects and it encourages not investment but endless rent-seeking,” Zycher wrote.
The case for repeal is gaining traction among economists and policy experts who see the Jones Act as a relic that hampers competitiveness and energy independence. As shipping traffic recovers in the Strait of Hormuz, the contrast between global market flexibility and domestic rigidity becomes even more apparent.
While the administration weighs its next move, the broader debate remains: Should a law born in the era of wooden ships continue to dictate modern energy and trade policy? For an increasing number of observers, the answer is a resounding no.
