It’s Time to Scuttle the Jones Act

The White House on March 18 announced a 60-day suspension of the Merchant Marine Act of 1920, known commonly as the Jones Act. The administration says the waiver aims “to mitigate the short-term disruptions to the oil market as the U.S. military continues meeting the objectives of Operation Epic Fury.” The nation’s “epic fury,” however, ought to be leveled against this century-old law, enacted to protect domestic shipping, which has not just failed in its objective but raised prices for consumers and damaged the very sector it intended to promote.

The Jones Act requires vessels carrying goods between American ports to be built domestically, owned by Americans, and crewed by Americans.  The U.S. shipping sector has flagged, becoming withered and aged. “In 2024, the United States—the world’s second-largest manufacturing country with a 17 percent share of world output—accounted for a mere 0.04 percent of global commercial shipbuilding,” the Cato Institute’s Colin Grabow reports. “The mediocre rankings and meager output reflect US shipyards’ extreme lack of competitiveness, with US-built merchant ships estimated to cost four to six times as much as those constructed abroad,” Grabow continues. What’s more, the operating cost of a Jones Act–compliant vessel comes to an additional $12,600 each day than that of an open registry vessel. Inflated labor costs account for nearly nine tenths of this surcharge. The Jones Act’s strictures have resulted in “fewer than 100 oceangoing ships, a tiny fraction of the global population, available to meet the transportation needs of the world’s largest economy.”

Economics 101 teaches that protectionism of all kinds raises prices, and the Jones Act has provided a case study for this lesson, particularly with respect to the energy industry. “The decrepit Jones Act fleet makes it cost prohibitive to move products from Gulf Coast refineries to the Northeast or the West Coast,” the Washington Post’s editorial board noted last week. Moreover, the law has reduced Puerto Rico and Hawaii to dependence on foreign energy. “Overall, repealing the Jones Act would have increased total Gulf Coast–to–East Coast movements of all fuels from 253 million to 371 million barrels per year, and economic efficiency would have increased by $403 million per year,” write Ryan Kellogg and Richard L. Sweeney, summarizing the findings of a 2023 working paper published by the University of Chicago.

Emergencies can be clarifying events (though often they are not). Exigencies imposed by circumstance often constrain politicians to drop their ideological qualms about commonsense reforms and to carry out those reforms, lest disaster set in. This is not the first time the Jones Act has been waived.  The New York Times reports that waivers were dispensed “after Hurricane Maria devastated Puerto Rico in 2017 and in 2021, when an energy pipeline was shut down by a cyberattack.” Moreover, the National Taxpayers Union catalogues waivers granted on the occasions of Hurricane Katrina (2005), Hurricane Rita (2005), military entanglements in Libya (2011), Hurricane Harvey (2017), Hurricane Irma (2017), and Hurricane Fiona (2022). Likewise, when, in 2022, a shortage of baby formula dominated American politics, President Joe Biden and Congress worked to liberalize regulations that kept foreign-made formula out of U.S. markets. An emergency is an exacting schoolmaster, but all too often its lessons vanish quickly from the memories of policymakers.

The White House seems to understand—at least implicitly—the effects of the Jones Act. “This action will allow vital resources like oil, natural gas, fertilizer, and coal to flow freely to U.S. ports,” White House press secretary Karoline Leavitt stated on X. This free flow, however, ought to be made the permanent policy of the federal government, in wartime and peacetime, in times of emergency or tranquility. Congress, the only institution which can repeal the Jones Act, remains unmoved. The Open America’s Waters Act, a repeal of the Jones Act introduced in the Senate by Sen. Mike Lee (R-Utah) and in the House by Rep. Tom McClintock (R-Calif.), has yet to escape committee in either the upper or the lower chamber.

The political history of America in the last century can be thought of as a struggle between two graduates of Princeton who rose to the Presidency: James Madison, a liberal philosopher and practical politician, and Woodrow Wilson, a progressive academic. “I am a friend to the general principle of ‘free industry’ as the basis of a sound System of political Economy,” Madison wrote. Wilson, whose pen made the Jones Act law, favored a managed American economy dominated by a purportedly disinterested progressive intelligentsia, an apparat of experts whose members thought as he did. “We are in the presence of a new organization of society,” he contended in 1913. “Our life has broken away from the past.” The Jones Act, perhaps a novel proposal, a part of the “new organization of society,” in 1920, is, in 2026, old and tired.

“The government now in Washington, D.C. is as much Woodrow Wilson’s as James Madison’s,” the Taxpayers Protection Alliance wrote last year. The disassembling of the Wilsonian artifice and the reassembling of the Madisonian order is a construction project that cannot be carried out within the lifespan of a single presidential administration or Congress. But the Jones Act is a loose stone that can be pried out and cast into the Potomac River posthaste, if only Congress can muster the will to repeal it.