We have a chance to fix the Jones Act - by Dylan Matthews

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We have a chance to fix the Jones Act<br>Republicans and Democrats want an affordability policy. I have a suggestion.

Dylan Matthews<br>Jul 31, 2026

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An oil tanker in New York Harbor, pictured in 2018. (Paul Harrison)<br>Here in the US, at least one 2026 policy change has been a clear winner for economic growth. Starting on March 17, 2026, the Trump administration has waived the Jones Act, America’s cabotage law barring non-US built vessels from conducting trade between US ports, for certain oil, gas, and fertilizer shipments. The waiver was extended in April; it’s currently set to expire on August 16.<br>This move shouldn’t have been overly surprising. Kevin Hassett, Trump’s Council of Economic Advisers director in his first term and National Economic Council head today, is a vocal Jones Act detractor, and wrote in a 2021 book that Trump hates the law too (“This Jones Act, it doesn’t make any sense,” he quotes the president saying). Casey Mulligan, another economist who served during Trump I and is now chief economist at the Department of Health and Human Services, reported the same in his memoir You’re Hired!: “President Trump hates the Jones Act. It is the type of harmful regulation that he has succeeded in ending in health insurance, telecommunications, farming, and many other industries.”<br>Of course, Trump World contains multitudes and other advisers (notably Peter Navarro, Trump’s “senior counselor for trade and manufacturing”) are vocal Jones Act defenders. Mulligan and Hassett, in their books, recall being defeated by Navarro and allies in Congress in term one when they fought for a Jones Act waiver for liquid natural gas. But that a waiver actually went through this year, and has continued to be renewed, suggests the law’s critics are winning the intra-administration fight this time around.<br>This makes 2026 perhaps the single most promising moment for meaningful Jones Act reform in decades. Durable reform, though, has to go through Congress, and will have to be bipartisan. It will also have to grapple seriously with what transitioning to a new regime looks like.<br>The case against cabotage

Defenders of the Jones Act like to call it “America’s oldest law,” noting that rules limiting which ships could use US ports are as old as the first Congress. But the “Jones Act” generally refers to section 27 of the Merchant Marine Act of 1920, a provision authored by a Seattle shipping lobbyist and added to the law by Washington Senator Wesley Jones. This is still the most important single statute regulating shipments between US ports.<br>As it exists today, the law requires that ships be…<br>Captained by a US citizen, with all US citizen officers, and US citizens making up at least 75 percent of the rest of the crew

If owned by a corporation, owned by a corporation with at least 75 percent US citizen ownership

Assembled in the US, with the “major components” of their hull, main deck, and other “superstructure” all built in the US

Cabotage laws like this are common internationally, but they often only restrict trade to vessels flagged in the country in question, or owned by nationals of that country, or crewed by staff in that country. The Jones Act is unusual in requiring that ships moving between US ports be built in the US. Most other countries with large cabotage trade, like China, Japan, and India, don’t require domestically-built vessels, despite the former two having massive shipbuilding industries much more successful than that of the US. As a result, only the 92 Jones Act-compliant US-built ships currently in operation can move between US ports when the Act is in effect.<br>The economic case against the Jones Act is simple: there are many useful trips to be taken by ships within the United States; the Jones Act, plus the tiny size of the Jones-compliant fleet, means many trips are not taken when the Act is in operation; allowing those trips to take place represents new, beneficial economic activity that we’re currently blocking.<br>Perhaps the best examples of these Jones-prevented trips are the ones happening right now, under the waiver. The Cato Institute has been tracking waiver-enabled voyages, and there have been 195 to date as of this writing, on 161 different vessels, shipping some 50 million barrels of various fuels and fertilizers (most of the volume is gasoline and crude oil). Those 161 vessels represent a more-than-doubling of the US cabotage fleet, relative to the Jones Act’s 93:

Jones Act-exempt shipping voyages, as of July 29, 2026. (Cato Institute)<br>As you can see from their maps, these journeys typically originate in the Gulf Coast, the center of US oil refining and export, and then make their way either to the northeast US, to Puerto Rico, or to the West Coast via the Panama Canal.<br>If you’re not especially interested in boosting oil shipments for climate reasons, don’t worry: the Jones Act...