The Jones Act: Balancing National Security and Economic Impact on U.S. Shipping Policy
In the annals of United States political history, there is rarely any legislation that has significant implications for our daily lives but is unknown and overlooked by even the most dedicated of policy wonks. However, in recent years, new light has shone on an over 100-year-old law that fits such a description: the Jones Act, formally known as the Merchant Marine Act of 1920.
In the aftermath of World War I, a precipitous decline in the American maritime industry raised alarm bells regarding the nation’s capacity to uphold a robust merchant marine fleet that remains crucial for both economic commerce and national defense. Attempting to address these concerns, Senator Wesley Jones of Washington spearheaded the introduction of the Jones Act.
The act safeguarded domestic shipping interests and created employment opportunities for Americans through mandates that solely U.S.-built, U.S.-owned, U.S.-registered, and U.S.-crewed vessels could trade domestically between U.S. ports. Over time, the Jones Act has assumed a vital role in American national security strategy, ensuring the availability of a fleet of vessels and a proficient cohort of mariners ready to support military endeavors and respond to emergencies.
However, the Jones Act hasn’t escaped criticism. A primary concern is its propensity to raise costs for domestic shipping. The stringent requirements on high-cost American manufacturing and labor inflate prices for domestic maritime shipping, particularly to states such as Alaska and Hawaii or to island territories like Puerto Rico and Guam. Critics further argue that by shielding domestic shipyards and shipping companies from international competition, the act thwarts market forces that could otherwise drive innovation and enhance efficiency, thereby lowering the overall quality of life.
Moreover, the prohibition of foreign-flagged vessels from engaging in domestic trade curtails any competition, fostering inefficiencies and resulting in higher prices on goods for consumers. Environmental concerns also surface, as U.S.-built vessels, typically pricier and less technologically advanced than their foreign counterparts, may disincentivize investments in newer, more environmentally friendly ships.
While it is safe to say that protecting domestic maritime interests is key to our national security, the government must also uphold its citizens’ economic interests. In the history of government policy, the Jones Act has increasingly become a subject of debate as calls to reform or repeal the legislation grow.
Read more:
Energy Policy Institute at the University of Chicago. (2023, December 11). U.S. shipping policy leads to higher petroleum prices, study finds. EPIC. https://epic.uchicago.edu/news/u-s-shipping-policy-leads-to-higher-petroleum-prices-study-finds/
The Economist Newspaper. (n.d.). What is the Jones Act, the Century-old law pushing up prices in America?. The Economist. https://www.economist.com/the-economist-explains/2022/04/11/what-is-the-jones-act-the-century-old-law-pushing-up-prices-in-america?utm_medium=cpc.adword.pd&utm_source=google&ppccampaignID=17210591673&ppcadID=&utm_campaign=a.22brand_pmax&utm_content=conversion.direct-response.anonymous&gad_source=1&gclid=CjwKCAjwnv-vBhBdEiwABCYQAwQPeVYOwU1TT3u5F_U1_mLWmPcs3PT3Fj9hEuizZgoN2gonnCU8PxoCwBgQAvD_BwE&gclsrc=aw.ds
Jones Act — cornerstone of US Maritime Safety & Security. American Maritime Partnership. (2017, October 17). https://www.americanmaritimepartnership.com/u-s-maritime-industry/jones-act-overview/
Biscardo, J. (2022, August 23). New Study confirms how Puerto Rico Benefits from Jones Act. Seafarers International Union. https://www.seafarers.org/new-study-confirms-how-puerto-rico-benefits-from-jones-act/
