What the Jones Act waiver reveals

The Jones Act, the American law that bans ships manufactured outside the US from traveling between US ports, has been an economic burden on the country for decades. The best study on its impact estimates the cost at 0.1 to 0.4 percent of GDP — which may sound small, but given the size of the US economy that means $31.8 billion to $127.4 billion in economic damage every single year. It’s particularly bad for clean energy, because offshore wind turbines need specialized ships to install them, and the US has built a grand total of one of those ships. Luckily, the Trump administration has waived the Jones Act for oil, fertilizer, and related products since March as part of the ongoing Iranian oil crisis. Colin Grabow at the Cato Institute pulled the data and found that in just two months, 45 voyages from 35 ships have taken place under the waiver, mostly moving various oil products from the Gulf Coast of Texas and Louisiana to the West Coast and Puerto Rico. That suggests meaningful pent-up demand for transit using foreign-built ships that the Jones Act is suppressing.