U.S. President Donald Trump said he would waive for 60 days the so-called Jones Act, which allows only U.S. ships to transport goods between U.S. ports, drawing attention to the law's provisions and the expected effects.
On the 18th (local time), White House Spokesperson Karoline Leavitt told reporters that the administration would waive application of the Jones Act for two months to address the surge in international energy prices following the Middle East war. The move will allow foreign ships to directly transport key energy resources, including jet fuel and fertilizer, between U.S. ports for the next 60 days, she said.
The Jones Act is the name for Section 27 of the U.S. Merchant Marine Act, enacted in 1920 to strengthen U.S. naval power and protect the shipbuilding industry. Under the law, only vessels that are built in the United States, have at least 75% U.S. equity, and have crews with at least 75% U.S. citizens can transport passengers and goods between U.S. ports. It has been widely applied to maritime transport between the U.S. mainland and Hawaii, Alaska, and Puerto Rico.
The Jones Act helped protect the U.S. shipbuilding industry in the short term, but critics have argued that it weakened industrial competitiveness amid expanded free trade after the Cold War. While Korea and China secured a quality edge in shipbuilding based on lower labor costs, U.S. shipbuilders, freed from competitive pressure, were slow to invest in research and structural improvement, resulting in a dismal report card: as of 2024, the U.S. share of the global shipbuilding market stands at 0.1%.
There has also been steady criticism that the law drives up the cost of transporting oil within the United States. That is because building the large oil tankers and liquefied natural gas (LNG) carriers needed for energy transport in the United States is estimated to cost at least three times more than in Korea or China. This is why the Waterborne Commerce Act of America, which centers on repealing the Jones Act, was introduced in both the Senate and the House in June last year.
Trump is also seen as having taken this grace measure as a stopgap to stabilize energy prices, which have been swinging wildly day after day. For example, when sending gasoline and diesel produced in West Texas or southern Louisiana to the East Coast, using foreign tankers could make supply smoother by lowering transportation costs.
On the day, May futures for Brent crude, the international benchmark, settled at $107.38 per barrel, and then surged into the $111 range per barrel after the close, breaking above $110 for the first time in nine days. April futures for West Texas Intermediate (WTI) also at one point during the session rose to $100.5 per barrel, extending gains.
Previously, waivers of the Jones Act were granted only in highly limited situations. Waivers were applied when thousands were displaced on the island of Puerto Rico after Hurricane Maria in 2017 and Hurricane Fiona in 2022, and a temporary exemption was also applied when Colonial Pipeline, the largest U.S. fuel supply network, was crippled by a ransomware attack in 2021. The recent chain of events triggered by the Middle East war is likewise seen as a signal of urgency.
Experts, however, are cautious about the impact of the measure. Basil Karatzas, CEO of New York shipping consultancy Karatzas Maritime Advisors, said, "It's a typical step taken in desperate circumstances, and the impact on gasoline prices may be limited," while adding, "It clearly sends a message that something is being done at the policy level."
Christopher Knittel, a professor at the Massachusetts Institute of Technology (MIT) Sloan School of Management, also projected that "the Jones Act's effect on gasoline prices will be around 1.5 cents (about 20 won)."