As the Administration reportedly prepares to extend a waiver of the century-old Jones Act beyond the currently scheduled August 16 expiration date, it is time to reconsider whether the law still serves its intended purpose.
What Is the Jones Act?
The Jones Act is a section of the Merchant Marine Act of 1920. It is a protectionist policy created after World War I to maintain a strong domestic shipbuilding industry in the case of war.
The Jones Act requires commercial vessels transporting merchandise between U.S. ports to be U.S.-built, owned, registered, and crewed. The law, meant to preserve U.S. maritime capacity, has instead left the United States vulnerable to a small and outdated domestic maritime fleet.
The global merchant fleet includes 62,000 vessels over 1,000 gross tons (the legal classification of a commercial fleet by the Maritime Administration), while fewer than 100 of these vessels are Jones Act-elegible vessels.
Overall, U.S. produced vessels cost four to five times more to construct, and U.S. flagged ships are over four times more expensive to operate. The Jones Act stands as one of the most restrictive pieces of global cabotage legislation and limits free trade, creating artificially high transaction costs for trade. (Cabotage refers to the ability of foreign carriers to transport goods or passengers domestically.)
Shipbuilders producing Jones Act-compliant vessels benefit from artificial demand for domestically produced ships that the Jones Act creates, while the resulting higher prices are dispersed across domestic shipping, downstream industry, and consumers. Despite the Jones Act’s intent, this law increases domestic transportation costs. The result is a U.S. shipbuilding industry that lags behind its foreign counterparts.
Even with a captive market, the high construction cost of Jones Act vessels reduces demand. Rather than purchase, upgrade, or change commercial vessels, inflated prices incentivize shipowners to keep older ships in service longer. The average age of the fleet is 27 years, which is five years older than the global average.
The current rate of U.S. commercial vessel production is one to five ships a year. While there are 64 major shipbuilding and repair bases in the United States, only eight domestic shipyards are actively capable of building large-scale vessels. In contrast, South Korea delivered over 230 commercial vessels in 2024.
Of the fewer than 100 Jones Act-compliant vessels operating in the United States, 31 are cargo vessels, 54 are tankers, and 8 are inactive as of November 2025. These vessels typically maintain regular service on fixed routes; between Hawaii, Puerto Rico, Alaska, and other non-continental U.S. territories.
Jones Act’s Impact
In a free economy, foreign vessels carrying merchandise across the Pacific would be able to stop at ports in Hawaii or on the West Coast, unload and load new goods, then continue to a continental U.S. port. However, because of the Jones Act, those vessels may unload foreign cargo at one U.S. port before continuing to another U.S. port, but may not load new, domestic goods.
This is particularly costly to non-continental territories like Hawaii, given they heavily rely on ocean shipping for imported goods. While Hawaii’s location already makes it an uncommon stop for trans-Pacific shipping routes, the Jones Act prevents foreign vessels that do stop at Hawaii from continuing to the mainland, further limiting shipping. The Grassroot Institute of Hawaii estimates that the Jones Act costs nearly $1,800 per Hawaiian household, overall costing Hawaii $1.2 billion annually.
Rep. Ed Case (D-HI) has introduced straightforward legislation to combat the damage the Jones Act inflicts on U.S. states and territories that are not part of the continental United States and therefore are especially reliant on shipping. The Noncontiguous Shipping Competition Act (H.R. 665) seeks to remove limitations created by the Jones Act for non-continental U.S. port stops, decreasing transportation costs.
Delayed Vessel Production
On July 23, 2025, the launch of the first Jones Act-compliant Subsea rock installation vessel (SRIV), the Acadia, was announced. The Acadia is capable of 20,000 tonnes of rock carrying capacity, compared to European built SRIVs, which had 35,000 tonnes of capacity over 16 years ago.
SRIVs have existed since the late 1970s, and advanced SRIVs have been developed since the 1990s. Yet, it took over 35 years for the United States to produce a similar vessel in an American shipyard.
Even then, the American built, owned, registered, and crewed flagship vessel was not built without foreign support. The Philly Shipyard that built the Acadia is owned by a major South Korean multinational conglomerate, the ship’s design was provided by a Dutch engineering firm, and the vessel is leaving the United States for European contracts for most of 2027.
Outcome
Previous administrations have waived the Jones Act eight times between 2005 and 2023 during periods of war and natural disaster. The current Administration waived the Jones Act for 60 days on March 17 to facilitate the transportation of goods like oil, natural gas, coal, and fertilizer resulting from the war with Iran. It later extended this waiver for an additional 90 days on May 17.
This waiver is the longest pause of the Jones Act since the Korean War. Nearly 200 total voyages between the U.S. have occurred in 135 days, voyages that would have previously been impossible. These waivers in periods of war and natural disaster represent the acknowledgement that the Jones Act limits global trade and increases costs.
Proponents argue that U.S. shipyards and manufacturing benefit from the Jones Act. However, research from the Mercatus Center finds that the legislation creates a net loss for the U.S. economy, as interstate shipping costs are passed through to businesses and consumers, while economic benefits are concentrated among shipbuilders and crews.
The Administration was wise to waive the Jones Act and to extend the waiver through August 16. Americans will continue to benefit if the Administration provides another 90-day extension.