NEW YORK — As the U.S. and Israel’s war against Iran continues to upend energy markets and supply chains worldwide, the Trump administration says it might suspend maritime shipping requirements under a more than century-old law known as the Jones Act.
The Jones Act requires that goods hauled between U.S. ports be moved on U.S.-flagged vessels. Passed in 1920, this law aims to protect the American shipping sector — but it’s also faced criticism over the years for slowing the delivery of goods, including critical aid during time of crisis. And it’s often blamed for making gas, in particular, more expensive.
The White House confirmed that it was looking into waiving Jones Act requirements this week, in a temporary measure that would arrive amid wider efforts to counter steep oil prices and cargo disruptions due to the war.
Here’s what we know.
The Jones Act’s official name is the Merchant Marine Act of 1920. Congress passed the law — sponsored Sen. Wesley Jones of Washington state — in an effort to rebuild U.S. shipping after German U-boats decimated America’s merchant flee during World War I.
Among other things, the Jones Act mandates that ships carrying cargo and passengers between U.S. ports must be built in the United States and owned by Americans — effectively prohibiting foreign-flagged ships from this domestic trade. The vessels are also required to carry U.S. crews.
The law can be waived in the “interest of national defense,” the U.S. Maritime Administration notes, either through the Homeland Security or Defense Department.
The Jones Act also was intended to ensure that the U.S. had its own merchant fleet in case of war. It’s been strongly supported by some U.S. shipping companies, national security advocates and organized labor. But cutting out foreign competition has also driven up the cost of carrying cargo domestically.
U.S.-flagged ships are generally more expensive to both operate and build than foreign ones. And those costs are especially damaging to states and territories that are supplied by sea, such as Hawaii and Puerto Rico.
Oil prices have spiked and swung rapidly since the start of the Iran war — which has effectively halted tanker movement in the key Strait of Hormuz and led major oil producers across the Middle East to cut production. Commercial ships — which, beyond fuel, haul cargo from pharmaceuticals to computer chips — have also been stalled at sea or faced attacks themselves.
That’s pushing up prices for businesses and consumers worldwide. Crude oil is now trading around $100 a barrel, up from roughly $70 before the war began. And in the U.S., drivers have already seen prices at the pump jump — with the national average for regular gasoline sitting at around $3.63 a g