After the war in Iran sent gas and diesel prices soaring, President Donald Trump has temporarily waived the Jones Act, allowing foreign ships to carry crude oil and gas between U.S. ports.
The move suspends the controversial law meant to protect U.S. domestic maritime interests for 60 days as a way to bring down prices at the pump, and secure supplies for military and national security operations.
The waiver was announced by White House Press Secretary Karoline Leavitt early Wednesday. “The Administration remains committed to continuing to strengthen our critical supply chains,” Leavitt said in a statement first reported by Bloomberg.
Dating to 1920, the Jones Act was designed to protect U.S. shipbuilding, stipulating cargo carried between American ports transit on U.S.-flagged, -built and -owned ships. The waiver covers coal, crude oil, refined petroleum products, natural gas, natural gas liquids, and fertilizer, according to Bloomberg, citing White House officials who requested anonymity.
The attack on Iran by the U.S. and Israel trapped hundreds of tankers and thousands of crew in the Persian Gulf, the center of Middle East crude oil production. The Strait of Hormuz, the narrow chokepoint for vessels in and out of the region, has essentially been closed to most traffic with Tehran only permitting ships from China, India and Turkey to pass.
The report quoted analysis that the waiver could reduce gas prices by 10 cents a gallon on lower shipping costs from Houston to East Coast markets.
The move could also free up fertilizer supplies coming out of the Gulf. Farmers in a letter to Trump said their businesses were imperiled by higher prices and fertilizer shortages as planting season nears.
One U.S. shipping trade group criticized the waiver.
“We are deeply concerned about this 60-day, broad waiver being abused and unnecessarily displacing American workers and American companies,” said the American Maritime Partnership, a coalition of ports and U.S.-flag carriers, in a statement. “The law sets a high bar: this waiver exists solely to address an immediate threat to military operations, not to displace American workers or reward foreign operators. Every vessel movement under this waiver must be publicly disclosed and justified according to federal law. We will be watching closely — and so will the American public.”
The group disputed the waiver’s effect at the pump, saying the impact of domestic shipping on the cost of gasoline nationwide is less than one cent per gallon.
This article was updated March 18 to add reaction from the American Maritime Partnership.
Read more articles by Stuart Chirls here.
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