House Speaker Mike Johnson and 51 Republican members of the U.S. House of Representatives are asking President Donald Trump to allow a waiver of a century-old shipping law to expire in mid-August as scheduled, months after it was issued in an effort to calm spikes in oil prices.
In March, after oil prices skyrocketed in the weeks after the U.S. and Israel launched their joint military campaign in Iran, President Trump waived the Jones Act as short-term relief to the problem.
The Jones Act, identified as Section 27 of the Merchant Marine Act of 1920, requires cargo moving between U.S. ports to be carried on American-built, owned and crewed ships.
By waiving the legislation, foreign vessels could facilitate the transport of petroleum and fertilizer throughout the country’s ports, thus reducing potential supply disruptions that could further hike fuel prices.
The initial waiver was set to last 60 days. One month into the waiver period, the Trump administration extended the suspension for 90 more days.
Oil prices have since eased over the past month, with the U.S. and Iran signing a framework deal aimed at ending the war and opening the Strait of Hormuz for 60 days. The state of both the hostilities and the Hormuz remain unclear, especially since Iranian officials have continued to assert control over the passage
The lawmakers said in a letter to the president made public Wednesday that the 106-year-old Jones Act is crucial for protecting the U.S. maritime industry and that the waiver is a “loophole” being exploited by other nations. They urged Trump to allow it to lapse as scheduled on Aug. 16.
“The domestic maritime industry is deeply concerned about the length, scope, and possible extension of the current Jones Act waiver, which was issued in part to address increases in fuel and fertilizer prices,” said the letter. “In practice, foreign-flagged vessels have operated under the waiver even in circumstances where U.S.-flagged vessels were available, creating understandable concern about the effect on American jobs, manufacturing and investment.”
Citing data from the Maritime Administration, the officials noted that approximately 95 percent of completed waiver voyages primarily benefit foreign maritime operators that do not pay U.S. taxes or comply with U.S. immigration laws.
In lieu of the waiver, the lawmakers encouraged the administration to utilize “alternative policy tools” to address fuel and fertilizer costs, without specifying the measures to take.
A Reuters analysis in May found the waiver of the act had little impact on domestic gasoline prices due to the increase in global ocean freight rates and the relatively small fuel volumes transported at the time.
While oil refiners used the exemption about 50 times in the first two months of the waiver, they moved “only a fraction” of daily U.S. fuel consumption, thus not making a dent on prices, Reuters said.
A recent analysis of the two-month period from maritime consulting firm Navigistics Consulting said the waiver failed to deliver on its stated objectives, noting that U.S.-flagged vessels were available for roughly 87 percent of the 78 qualifying voyages monitored. Navigistics argued the Trump administration bypassed domestic operators despite sufficient capacity, indicating that 23.1 percent of waiver vessels were built in China and 18.5 percent were controlled by Chinese interests.
A White House spokesperson later said data compiled since the initial Jones Act waiver showed that “significantly more supply was able to reach U.S. ports faster.”
The back-and-forth over the success of the waiver follows a lingering debate in maritime circles about the effectiveness of the Jones Act itself.
The arguments for and against the legislation are often tied to U.S. shipbuilding practices, which have lagged behind China for decades. Trump has sought to bolster the country’s shipbuilding capabilities, launching a Maritime Action Plan to increase domestic capacity to build more military and commercial vessels.
Speaker Johnson and the other Republican lawmakers spoke in support of the Jones Act in the letter, saying it “has helped sustain a safe and reliable commercial fleet, supporting hundreds of thousands of well-paying American maritime jobs and moving more than 760 million tons of domestic cargo each year, including agricultural products, petroleum, steel, coal, and other essential commodities.”
The law’s detractors call it a protectionist measure that holds back trade due to the requirement to build more U.S. ships, which cost more to manufacture and ultimately raise prices for goods and commodities transported domestically.
Critics say that the Jones Act harms the shipbuilding industry itself, in that American shipyards are shielded from international competition via its enactment, thus further inflating construction costs.
