Trump Administration Plans Jones Act Waivers in Effort To Lower Skyrocketing Fuel Costs

The Trump administration is reportedly planning to issue temporary waivers to a 100-year-old maritime law and allow foreign-flagged tankers to move oil between American ports in an effort to rein in surging fuel costs.The Merchant Marine Act of 1920 — better known as the Jones Act — normally blocks foreign ships from moving goods from one American port to another. The act was designed to build up an American merchant marine fleet and ensure self-reliance during wartime. The act, however, severely limits shipping options for the domestic fuel industry and countless other industries.The statute requires that goods “transported by water, or by land and water” between points in the United States, either directly or via a foreign port, be carried in an American-built and owned vessel. It also requires that at least three quarters of the crew be American.The Trump administration plans to give 30-day waivers to foreign tankers to move oil, Bloomberg reported on Thursday, citing unnamed sources. A timeline for those waivers was not known.A 2024 Customs and Border Protection compliance publication states that blanket waivers cannot be issued for specific events or locations but must be issued on a ship-by-ship basis. An initial waiver is limited to 10 days; all waivers and extensions of waivers with respect to any one set of events may not exceed 45 days.Waiver requests must be published on the customs department website for 48 hours before they can be granted. Requests for waivers of the Jones Act are reviewed on a case-by-case, vessel-by-vessel, voyage-by-voyage basis, according to the department.The rules also stipulate that waivers may not be granted for vessels already carrying merchandise.The Jones Act waivers are among several tools President Trump is considering using to reverse a rapid surge in oil and gas prices in the wake of the joint American-Israeli attacks on Iran.Iran has threatened to attack vessels in the Strait of Hormuz, and has reportedly started deploying mines in the narrow passage through which about 20 percent of the world’s oil normally travels. That has essentially stopped tankers from moving through the strait.The Trump administration has announced that it will release 172 million barrels of oil from strategic reserves as part of a worldwide effort to raid reserves totaling 400 million barrels of oil.That did not bring relief to oil markets. Benchmark Brent crude oil futures jumped nearly 10 percent on Thursday to more than $100 a barrel. Prices sat around $66 a barrel a month ago.While American shipbuilders support the Jones Act, critics say it is raising costs for American companies and consumers. A 2011 report by the Department of Transportation Maritime Administration showed that American-flagged carriers have more than double the costs of foreign-flag carriers.The libertarian-leaning Cato Institute has long called for the Jones Act to be reformed or repealed. It says the requirement that ships be American-built is the most damaging part of the act. Cato says there are only a few remaining American shipyards and their prices are up to five times that of ships built abroad.The institute also says the waiver requirements under the Jones Act could be relaxed to make it easier to obtain one.The last Jones Act waiver came in 2022 for a tanker to deliver supplies to Puerto Rico after Hurricane Fiona.

Trump Administration Plans Jones Act Waivers in Effort To Lower Skyrocketing Fuel Costs

Trump Administration Plans Jones Act Waivers in Effort To Lower Skyrocketing Fuel Costs

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