Christian Purchon

May 8, 2026

The Trump administration recently announced a 60-day suspension of the Jones Act, a 1920 maritime law that dictates how goods are moved between U.S. ports. Specifically, this law dictates that vessels moving between U.S. ports must be American made, owned, and crewed. The suspension came on the third consecutive week of the US-Israeli led war in Iran which has caused a spike in energy prices globally.

The 60-day moratorium on this century old act is meant to counteract that price surge by allowing non-American made oil tankers to carry liquefied natural gas between American ports, bringing down prices at the pump. Production of LNG is extremely arduous and only a few countries hold the capacity for high export – the biggest being the United States, Australia, and Qatar. In retaliation to the U.S.-Israeli led war, Iran has closed the Strait of Hormuz, causing movement of oil tankers through the strait to stall and prices to rise; this is a global energy disaster because transport through the Strait of Hormuz is responsible for a fifth of the world’s oil consumption.  According to the New York Times, some states have seen up to a 30% increase in gas prices [1]. Critics argue that suspending the JonesAct will have a minimal practical effect on gasoline prices [2] – but it will certainly have visible effects on the shipping economy and raise awareness of the law.  

Before getting into the effects of the Jones Act and why this suspension is so important, it’s imperative to lay out exactly what this law does. According to the Congressional Research Service, “The Act requires that all waterborne shipping between points in the United States be carried by vessels built in the United States and owned and operated by Americans. The purpose of the Act is to ensure that the nation has a sufficient merchant marine and shipbuilding base to protect the nation’s defense and commercial interests.”  

Policy experts have long admonished the Jones Act as an outdated form of economic nationalism which unfairly taxes consumers, especially on non-contiguous U.S. territories like Hawai’i, Puerto Rico, and Alaska. It was drafted and passed in the wake of World War 1, when German U-boats sunk many American vessels. The law was intended to reignite the American shipping industry and ensure jobs were being created after such a catastrophic war. 

The only problem with this goal, however, is that it has largely failed.  

According to the CATO institute, there are nearly 7,500 oil tankers transporting this liquid energy globally, and of those, only 54 are compliant with the Jones Act [3]. The lack of compliant vessels foists an unnecessary economic strain on the oil shipping industry, a vital economic sector. Additionally, US-built vessels cost almost $220 million to create on average, compared to $50 million to build a similar vessel in Asia. In a 60 minutes interview that aired in March, correspondent Lesley Stahl referred to the US shipbuilding capacity as “nearly extinct” [4]. The U.S. holds only 94 Jones Act compliant ships in total, totaling out to less than 100 U.S. built ships in 106 years [5]. 

Whether companies comply with this law or invent complicated workarounds, the absurd price of compliance directly translates to an increase in price for consumers. This is the main problem with the law. 

The biggest impact is on U.S. economies dependent on sea transport. Puerto Rico, for example, imports 85% of its food and almost all of its energy. Being a U.S. territory, the Jones Act applies to this little island – costing an estimated $203 extra dollars per consumer annually [6].

Hawai’i is yet another economy that suffers from this law. A non-U.S. vessel carrying goods from China for example, cannot stop to deliver in California and then continue to Hawai’i – it must choose one port to stop at, and there is no practical reason to choose the smaller economy. If the ship did want to continue to Hawai’i, it would have to dock in California, deliver its goods, then transfer said goods to a U.S. flagged, built, and crewed vessel. All of these steps increase the price of the operation, and that price is passed on to the consumer to make up for the increase. So not only does this protectionist law of a bygone era not bolster American job growth, but it also hurts consumers.  

Given the Trump administration’s fiercely protectionist, so-called “America First” economic policy direction, it’s unlikely that this law will be completely repealed. 60 days is not enough to fix this broken system, but its temporary rescission will draw attention to the issues it causes.  

The Jones act was intended to protect American workers and industry, but unfortunately the market can be heartless. America does not currently have the shipbuilding capacity to keep up with the global shipping demand, and Americans suffer for it rather than benefit – especially island territories like Puerto Rico who have enough economic challenges to worry about. This archaic law strangles America’s competition in the global shipping economy and makes the lives of Americans more expensive; it must be permanently repealed.  

Image Credits: https://www.pexels.com/photo/containers-in-a-harbor-seen-from-above-16765239/

Sources

[1] Gas prices have risen more than 30% in some states in weeks since Iran war began – The New York Times. Accessed April 12, 2026. https://www.nytimes.com/2026/03/22/us/gas-prices-south-southwest.html.  

[2] Sorace, Stephen, and Edward Lawrence. “Trump Waives Jones Act for 60 Days in Bid to Free up the Flow of Oil to US Ports.” Fox Business, March 18, 2026. https://www.foxbusiness.com/politics/trump-waives-jones-act-60-days-bid-free-up-flow-oil-us. 

[3] Grabow, Colin. “When US Gasoline Has to Leave the Country to Move Within It.” Cato.org. Accessed April 12, 2026. https://www.cato.org/blog/jones-act-forces-us-gasoline-take-long-way-home. 

[4] Grabow, Colin. “60 Minutes on US Shipbuilding and the Jones Act.” Cato.org. Accessed April 12, 2026. https://www.cato.org/blog/60-minutes-us-shipbuilding-jones-act. 

 [5] “The Jones Act Arguably Cuts the U.S. Ship Fleet in Half: News Article.” Independent Institute, August 5, 2025. https://www.independent.org/article/2025/08/02/jones-act-shipping-regulations/. 

[6] The jones act’s economic burden on Puerto Rico: High costs, hindered recovery, and paths to reform | medium. Accessed April 12, 2026. https://medium.com/@IvIeMph/the-jones-acts-economic-burden-on-puerto-rico-high-costs-hindered-recovery-and-paths-to-reform-8e6e046bfa00.