President’s waiver of Jones Act reduces prices, expands access to American products, yields valuable information

“President Trump’s decision to waive the Jones Act, a century-old law that restricts domestic shipping to US-built, US-flagged, and US-crewed vessels, is generating valuable information about the costs of maritime protectionism. Because compliant tankers are scarce and expensive, the law often makes it uneconomical to ship petroleum products by sea between US ports. Removing that constraint revealed how much trade the law had been suppressing. In the first 50 days after the waiver took effect, foreign-flagged tankers moved record quantities of petroleum products between the Gulf Coast and the West Coast. They also carried propane to Puerto Rico, where the Jones Act typically makes domestic shipments so expensive that buyers rely on foreign imports from as far afield as Chile. A better world is possible!,” says The Doomslayer.

“Puerto Rico Finally Gets Access to U.S. Propane” due to Trump’s waiver of the Jones Act. “Although the United States is one of the world’s leading exporters of propane, shipping bulk quantities to Puerto Rico had previously been impossible, as there are no liquefied petroleum gas (LPG) tankers in the Jones Act fleet to transport it. Barred from US propane, Puerto Rico had to turn to more distant sources, such as Chile,” notes economist Colin Grabow of the Cato Institute.

The Jones Act has long harmed the U.S. economy and driven up gas prices. Fortunately, it allows presidents to waive its costly requirements in various circumstances. When President Trump “waived the 106-yr-old Jones Act to help alleviate the subsequent pain at the pump” in March, Real Clear Markets noted that the Jones Act “belongs in the scrap bin of history.”

In addition to harming the U.S. economy, the Jones Act also increases traffic congestion, noted Daniel Savickas of the Taxpayers Protection Alliance:

Federal policy has also exacerbated traffic congestion on I-95’s northeast corridor and deprived motorists of alternate routes. The Jones Act – one of America’s most nefarious laws – restricts domestic water commerce to ships that are built, registered, and owned in the United States. This creates very few options for travel between American ports.

In February, the Cato Institute conducted a study, analyzing the Jones Act’s impact on Northeastern traffic. They found the region to be home of six of the ten most congested roads in America and two of the five most congested cities in the world. A large part of this is because of the sheer volume of truckers moving freight on these northeastern highways, and – as any motorist knows – driving more slowly than the average highway traveler.

Shipping between American ports would be more efficient because ships can carry more in  single trips. It would also be more environmentally friendly, given the emissions savings that would emerge from the resulting efficiency. However, protectionists and maritime shipping unions have prevented this law from being taken off the books for over a hundred years. We are now seeing the costs more clearly. It has strained the highways and left many without alternatives when disaster occurs.