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When the Trump administration announced a 60-day waiver of the Jones Act in March, I was thrilled for a moment.
For those who haven’t sat next to me at a dinner party, the Jones Act is a World War I-era shipping law requiring goods moved by water between two U.S. ports to travel on vessels that are U.S.-built, U.S.-flagged, and crewed by Americans. For over a century, the Jones Act has pushed freight off boats onto higher-emission trains and trucks, impeded climate change responses such as offshore wind and disaster recovery, and raised prices for Americans. Not yet reading the fine print of the waiver, I assumed we’d get an amazing experiment where we could see how a free market for American shipping would work. We’d unleash boats across the country, slash emissions, and curb wartime inflation. We might even get some momentum to repeal the law altogether.
Then, as I sat down in April to research more deeply for The Pebble, I discovered the catch.
Trump’s waiver was not a blanket suspension as I had naively assumed. On April 16, his administration published a list of products “potentially covered” by the waiver. It was a laundry list of hundreds of fossil fuels, petrochemicals, agricultural inputs, and other polluting products. The majority of America’s cargo would not be granted an exemption.
Quickly thereafter, I discovered that the president may even be breaking the law. Congress gave presidents the power to waive the Jones Act during crises, but only when they determine it is needed to address an “immediate adverse effect on military operations.” Many of the fossil fuels and petrochemicals on the covered products list are difficult to connect to current disruptions or immediate military need, while several non-fossil products with a far stronger claim to national-defense relevance are completely omitted. Waiving the Jones Act to stabilize energy markets may be a worthy goal, but Congress never gave the president the authority to do that. Yet, White House spokespeople are openly admitting this to be the goal, with seemingly no pushback from a purely legal standpoint.
As I published in RealClearEnergy on April 23, Trump’s waiver is a fossil fuel handout. It demonstrates that Washington knows the Jones Act is costly but will only waive it for preferred industries at the expense of the climate, free markets, and long-term national security. The next day, Trump extended the waiver for another 90 days, placing its end date in mid-August. Since then, many of my fellow Jones Act critics have applauded the waivers, trying to initiate momentum for an all-out repeal.
I agree that the law should be repealed, and will not complain if that’s where this momentum leads. But supporting Trump’s waiver is not the same as opposing the Jones Act. The Jones Act picks winners and losers by shielding American shipbuilders while imposing higher costs on consumers, the climate, and the economy. Trump’s waiver picks winners and losers too, illegally steering relief to fossil-fuel and petrochemical interests while preserving the same broken system for everyone else. Whether your priority is climate, free markets, or basic common sense, neither side of that trade is worth defending. Only Congress can deliver the real solution: repeal.
Keeping up with the Jones Act
Maritime shipping is one of the hidden backbones of global trade. It moves the majority of the raw materials, components, and finished goods that modern life depends on, from fuel and electronics to appliances and food. And despite the grim headlines shipping rightly gets for pollution, it remains one of the cleanest ways to move cargo. Maritime shipping accounts for roughly 3% of global greenhouse gas emissions, but it is still far less of a climate issue than other modes of cargo transportation. Per the European Environment Agency, maritime shipping emits about 7 grams of carbon dioxide to move one ton of freight one kilometer, compared with 24 grams for rail, 137 for trucks, and 1,036 for airplanes. That means the climate goal in maritime shipping is not to do less of it. In many cases, it is to do more of it, and find ways to do it cleaner. We did an episode of The Sweaty Penguin exploring this in more depth, which you can listen to here.
Shipping’s advantages are not just environmental. Containerization lets a single vessel move extraordinary quantities of cargo efficiently; about 90% of non-bulk cargo worldwide is transported by container ship, and the world’s largest container ship has the capacity to carry a whopping 24,000 TEUs (with one TEU measuring a 20-foot long, 8-foot wide container). Maritime transport is also often 8 to 16 times less expensive than air freight and is especially well suited to hazardous materials and very large loads. But ships are far from pollution-free. The industry is responsible not only for a large climate footprint but also for 9% of sulfur oxide and 18% of nitrogen oxide emissions, in part because many vessels run on bunker fuel or heavy fuel oil, a cheap, sulfur-heavy byproduct of oil refining. Shipping also creates risks from oil spills, bilgewater dumping, metal pollution from anti-fouling paints and scrubbers, and vessel strikes on marine animals. In other words, maritime shipping is far from perfect, but by far the cleanest option and has potential to improve even further as technology develops.
That is what makes the Jones Act so frustrating. The law, formally the Merchant Marine Act of 1920, requires cargo moved by water between two U.S. ports to travel on vessels that are U.S.-built, U.S.-flagged, and crewed by Americans. Its stated purpose was to preserve domestic shipbuilding and maritime capacity for national defense. But there is little evidence to suggest this strategy is worth its enormous cost. Building a container ship in the United States can cost up to five times as much as abroad, while transporting crude oil on a Jones Act tanker can cost three times as much. Matson paid $209 million apiece for two ships in 2013 and roughly $333 million apiece for three similar ships in 2022, even though a comparable foreign-built vessel might cost about $30 million. Those costs get passed through the economy, invisibly raising prices for all Americans.
Because of these costs imposed by the Jones Act, domestic shipping in the U.S. is done almost entirely via trucks and trains. Only about 2% of all U.S. freight is carried by ships, and coastwise shipping tonnage has declined by roughly 44% since the 1960s despite enormous growth in coastal U.S. cities. Beyond the economic and environmental damage this system causes broadly, the law’s costs are especially painful in places that rely heavily on maritime shipping. In Puerto Rico, The Sweaty Penguin’s interviewee on the subject Russell Hillberry found that the Jones Act reduces final expenditures by about $1.4 billion per year, with households alone paying roughly $691 million of that burden, or about $203 per Puerto Rican per year. The distortions are severe enough that Puerto Rican consumers buy potatoes from Canada rather than the mainland United States, and the costs to ship fertilizer were prohibitive enough to wipe out once-important agricultural production such as sugar. In Hawaii, estimates cited in the episode found that the Jones Act costs the average family nearly $1,800 per year. In Alaska, government reports from the 1980s found annual costs of roughly $225 million for the oil industry and $4.77 million for timber alone.
The Jones Act has also disrupted the energy transition in the United States. As I wrote in January’s newsletter, China has 177 operational offshore wind farms, the UK has 45, and Germany has 32. The United States, meanwhile, has 3, and the Jones Act is a major reason why. Turbine components arrive at U.S. ports and then need to be moved to offshore construction sites, but the industry relies on highly specialized wind-turbine installation vessels. Until very recently, the U.S. had zero Jones Act-compliant vessels capable of doing that work. Developers have thus had to rely on bizarre workarounds: ferrying parts back and forth from Canada or setting up Jones Act compliant feeder vessels to shuttle parts back and forth to the installation vessel at sea. After several years of construction and budget overruns, Dominion Energy finally completed construction of the first Jones Act compliant ship that can install offshore wind turbines, which in the end cost a whopping $700 million to construct, far more than any other country has to pay.
Statute overboard
The President’s Jones Act waiver, announced on March 18, was issued under subsection 501(a), the broader of the two emergency waiver powers under the Jones Act. The law reads: “On request of the Secretary of Defense, the head of an agency responsible for the administration of the navigation or vessel-inspection laws shall waive compliance with those laws to the extent the Secretary considers necessary in the interest of national defense to address an immediate adverse effect on military operations.” The phrase “immediate adverse effect on military operations” was added by Congress in 2021 in an attempt to restrict presidents’ use of the waiver. Of course, the president is tasked with enforcing laws passed by Congress, meaning for as much criticism as I have for the Jones Act, President Trump must enforce it properly and ensure his waiver is in line with the aforementioned requirement. By my reading, it seems he has failed in this regard.
I wrote in the RealClearEnergy piece how the April 16 covered-products list demonstrated that Trump’s new waiver was not tailored to military operations as the law requires. Of the 667 products, many have immediate military applications and severe shortages caused by closures in the Strait of Hormuz, such as jet fuel, diesel, lubricants, and other refined fuel oils. But many don’t. The list covers several agricultural inputs such as urea, ammonium sulfate, potash, and superphosphates, which have been disrupted by the war and matter economically, but have no clear military application. Coal and several of its byproducts made the cut, despite coal facing no market disruptions right now. It also includes many industrial solvents and thinners, non-fuel alcohols, and edible and medical soybean oils, with entries such as “pharmaceutical grade soybean oil for IV fat emulsions” and “lubricating preparations for treatment of textiles” standing out as completely unrelated to national defense.
On the flipside, many non-fossil products with military applications have been omitted, suggesting the list was built around boosting fossil-fuel interests rather than national defense. The Iran War has impacted global supply chains for aluminum and helium and South Korean manufacturing of semiconductors and memory chips, yet none of these critical items appeared in the guidance. The U.S. military is also engaged in response efforts in the Pacific right now. On April 11, Super Typhoon Sinlaku hammered the Commonwealth of the Northern Mariana Islands (CNMI) and Guam, two U.S. territories, with sustained winds of 175 miles per hour. CNMI and Guam urgently need supplies including bottled water, baby formula, non-perishable food, flashlights, candles, tarps, tents, tools, and personal care products. CNMI is exempt from the Jones Act but Guam, which has the bigger port, is not. Despite the Trump administration ordering an emergency and sending the Coast Guard and Navy to respond to the disaster mere days before issuing its list of “military emergency” products, none of the basic goods needed for typhoon relief made the list.
The administration published a new guidance for potentially covered products on April 24 when they extended the waiver, and unfortunately, that list did not correct any of these issues. Rather, it added four categories of methanol, two of which were “methanol for chemical production” and “methanol for wastewater treatment.” It is hard to imagine chemical production being fast enough to meet any “immediate military need,” and unless the military plans to offer Taco Bell at the commissary, it’s hard to imagine wastewater treatment being within the realm of urgent national defense as well.
I further wrote last month that the waiver’s overreach was not just theoretical. At the time, the U.S. Maritime Administration had published ten non-American ships that used the waiver to travel between U.S. ports, and even that early list made clear this was not a narrowly tailored military emergency program. One carried more than 100,000 barrels of undenatured ethanol for Valero through Texas to be used for gasoline blending, which could not plausibly address any immediate military fuel demand. Another stretched the law even further by carrying anhydrous ammonia, which is primarily used to make nitrogen fertilizer — not an obvious military necessity, and a product responsible for 2.1% of global greenhouse gas emissions. Many of the voyage reports included vague or insufficient “explanations of national defense interest,” ranging from simply citing the original waiver guidance to openly admitting that shipments were meant to stabilize energy markets — a worthy goal, but not the legal standard.
As of the latest report dated May 11, the pattern had only grown clearer. The public voyage list had expanded to 45 shipments, and the new cargoes made the waiver look even less like a response to an “immediate adverse effect on military operations” and more like a standing handout for fossil fuel and petrochemical interests. A second anhydrous ammonia voyage appeared. So did a non-calcined petroleum coke shipment from Texas to Florida — a byproduct of oil refining used mainly as an industrial fuel, especially in cement production. Even if downstream products made with petroleum coke can matter to national defense, shipping an intermediate product used in the manufacturing process can’t support any immediate military need. Furthermore, the vessel’s own “explanation of national defense interest” made no mention of cement or any other product it is being used to manufacture. Instead, it offered vague language about “mitigating disruptions to the U.S. oil market” and allowing fossil fuels to “flow freely,” even though moving a refinery byproduct has little to do with relieving any immediate fuel shortage.
The rest of the voyage list shows the same pattern: the waiver is being used not just for fuels in obvious shortage with immediate military applications, but for a growing list of intermediate products used to make, mix, or process commercial gasoline and other petroleum products. Some shipments carried naphtha, a partially refined oil product used to make plastic, rubber, gasoline, and other petrochemicals. Others carried gasoline blend stock, ethanol, and isomerate, which are ingredients mixed together to make finished gasoline. Still others carried vacuum gas oil and low-sulfur vacuum gas oil, more unfinished refinery products that are processed further into fuels. These refining inputs are not the kinds of cargo that must move immediately to avoid harm to military operations. And the justifications still do not improve. Some say “Not Applicable.” Others just cite the original waiver. Others openly say the goal is to “stabilize energy markets” or “mitigate the short-term disruptions to the oil market.” At this point, the issue is no longer merely that Trump stretched the law on paper. It seems to be a violation in practice, with many of the 45 shipments to date having no immediate defense rationale, and seemingly no one has challenged the legality of it.
A sinking ship by design
While Trump’s waiver appears to exceed his authority under subsection 501(a), the deeper problem is that the Jones Act’s waiver framework was already built around short-term commodity disruptions rather than long-term resilience. Subsection 501(a), the pathway Trump used, is tied to an “immediate adverse effect on military operations.” The other pathway, subsection 501(b), allows case-by-case waivers only after public notice, generally for no more than 10 days at a time and no more than 45 days total. That structure is a natural fit for rerouting a tanker or bulk shipment already in motion. It is a terrible fit for the kinds of slower, more complex logistics that climate resilience and disaster recovery often require.
That matters in the Pacific right now. Trump’s current waiver does nothing for Guam and CNMI, because the relief goods those territories actually need are not on the covered-products list. But even setting Trump’s product choices aside, the statute itself is poorly designed for this kind of emergency. A competent administration could plausibly decide that getting mainland relief cargo to Guam serves the national defense, especially when the military is already involved in the response. The problem is that one-off voyages from the mainland to the western Pacific take time to evaluate, price, schedule, and load. A 10-day waiver window is obviously too short. Even a 60-day or 90-day window, announced only after the disaster, may be too little too late for shippers to calculate costs and organize a voyage. If a president had the ability to issue a long enough waiver up front, the statute could at least create the option of mainland relief shipments for medium- and long-term recovery. Instead, the current system is built for cargoes that can be rerouted quickly, which again means fuel and other bulk commodities are favored while broader disaster needs are left behind.
The same mismatch appears in energy. If fuel shortages during wars and weather emergencies are routinely treated as national-defense problems, then reducing dependence on fuels vulnerable to those shocks should count as a defense interest too. But the waiver system is built around “immediate” need in subsection 501(a) and short-duration, case-by-case relief in subsection 501(b). That makes it practically useless for the kinds of long-cycle projects that would reduce fossil-fuel vulnerability in the first place. Offshore wind is the clearest example. Offshore wind developers do not make shipping decisions in the middle of construction on a rolling ten-day basis. They have to choose their installation model from the start: either use costly Jones Act-compliant feeder barges to shuttle components out to a foreign installation vessel, ferry parts in from Canada or another country to avoid touching two U.S. ports, or — in theory — rely on a waiver to mimic the rest of the world and let one foreign wind turbine installation vessel do the job directly and incur far lower development costs. But if all waivers must carry a short time limit, it’s almost useless for that purpose. Telling a developer in the middle of a multi-month construction campaign that a vessel can legally operate between U.S. ports for the next 10 days, or even the next 60 or 90 days, does nothing because the financing, contracting, port planning, and vessel scheduling had to be locked in long before. A waiver issued for a specific vessel that lasted for the duration of the project might actually create a workable alternative. But the current system does not allow that. When conflicts send the price of oil and gas skyrocketing, oil and gas can get relief from the Jones Act, while their far less volatile alternatives cannot.
While I appreciate my liberty-minded colleagues drumming up energy to oppose the Jones Act, cheering Trump’s waiver or calling it some free-market experiment completely misses the point. The Jones Act is bad because it rigs the market in favor of one politically protected group — domestic shipbuilders — while consumers, coastal regions, and the climate pay the price. Trump’s waiver does not undo that logic. It reproduces it. Instead of opening American shipping to broader competition, it creates a second winner-picking system in which fossil-fuel and petrochemical interests get selective relief while everyone else remains trapped under the same costly law. Whether your instinct is pro-climate, pro-market, or simply anti-absurdity, that is not a model worth defending.
America does not need a president wielding ultimate power over who gets to skirt the Jones Act and for how long they can do it. It needs Congress to step in and repeal the whole thing.