Free Trade

Trump’s Jones Act Waiver Is Only A Temporary Stop-Gap, Repeal Is The Real Solution

After a vocal and surprising bipartisan pushback, President Trump on Thursday waived the Jones Act for Puerto Rico in the aftermath of Hurricane Maria.

Critics of the act, including conservatives, libertarians, and progressives, hailed it as a victory. But the celebrations may be premature.

The Jones Act, loathed by economists but loved by the domestic shipping industry it protects from competition, is a law that forbids all but American-built, American-flagged, and American-crewed vessels from sailing from one American port to another.

Because of this, it costs about twice as much to ship goods from the east coast to Puerto Rico than it does to nearby foreign nations like Jamaica and the Dominican Republic.

Trump had originally held fast on the protectionism of the Jones Act, citing the concerns of the domestic shipping industry. He has now waived it by executive order for 10 days.

No action on Jones Act without request by the governor of Puerto Rico

A 10-day waiver smacks of a cynical political move, trying to appease the critics without making any substantive change. That’s barely enough time for the contracts to be negotiated and written and a single delivery made.

Speaking at the White House briefing on Thursday, Trump Homeland Security Advisor Tom Bossert conceded that the waiver wouldn’t have authorized by Trump were it not for the request of Gov. Ricardo Rossello.

“I wasn’t recommending to the President that he waive the Jones Act at the time until I got the governor’s request,” Bossert said.

Speaking more generally about the Jones Act, Bossert said:

The Jones Act favors U.S. flag vessels.  If there are not enough U.S. flag vessels to meet the need, then we waive the Jones Act. In this particular case, we had enough capacity of U.S. flag vessels to take more than, or to exceed the requirement and need of diesel fuel and other commodities into Puerto Rico.

That says nothing of the hardships and higher prices that the Jones Act imposes, day in and day out, on America’s island states and territories. Nor does it address the fact that it makes it vastly cheaper for Puerto Rico and Hawaii to import foreign goods from foreign ports of call, than it is for them to receive American goods from the country they’re nominally part of.

After the 10 day waiver expires, Puerto Ricans reeling from a natural disaster will again be cut off from the country they’re nominally part of, blockaded and prevented from accessing the vast majority of the world’s shipping capacity – unless this first wavier is followed by another waiver, or a more substantive measure.

It will still be cheaper to ship goods to Puerto Rico from Europe or China on international cargo carriers, than from Miami or New York City.

The need is clear and the answer is present: Congress needs to repeal the Jones Act altogether.

(Photo of Matson container ship via Wikipedia.)


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