(WASHINGTON) — President Trump has extended a Jones Act waiver allowing foreign-flagged ships to transport oil and other commodities around the United States for 90 more days, but added new caveats as the war in Iran disrupts the flow of crude oil and raises fuel costs.
Trump narrowed the scope of relief from the Jones Act, requiring case-by-case reviews of individual voyages after pleas from shipbuilders and their allies on Capitol Hill who argue the waiver hurts the domestic industry. The administration initially advocated for the waiver, which as been in place since mid-November, as a way to lower gas prices for Americans. The waiver extension was finalized Monday.
The Pentagon going forward must consult with the U.S. Maritime Administration (MarAd) on the availability of U.S.-flagged, U.S.-owned and U.S.-operated vessels before deciding whether the waiver will apply to individual voyages. The extended waiver is also focused more squarely on the movement of energy. It will apply to vessels carrying a much smaller assortment of commodities than the original policy, including gasoline, jet fuel, crude oil, naphtha, liquefied natural gas, soy oil and fertilizers.
The extension maintains relief from requirements of the Jones Act, a 1920 law that forces goods carried between domestic coastal ports to be transported on U.S. ships. The waiver, had been scheduled to expire on Aug. 16. Dozens of U.S. House Republicans, including Speaker Mike Johnson and Majority Leader Steve Scalise, had appealed to Trump to stop waiving the Jones Act. Both men represent Louisiana, a major U.S. shipping hub.
The waiver has been used by foreign-flagged ships for more than 230 coastal transits, according to U.S. government data. That has included a surge of shipments from the U.S. Gulf Coast to the West Coast, as well as deliveries of American liquefied petroleum gas to Puerto Rico.
“President Trump’s decision to require a case-by-case review before allowing foreign vessels to carry domestic maritime commerce is an improvement over the previous blanket Jones Act waiver, which took work from American mariners and shipbuilders and froze investment in the maritime industrial base,” said Jennifer Carpenter, president of the American Maritime Partnership (AMP). “However, we are disappointed that the waiver has been extended when the public record is clear: the waiver has not lowered fuel prices for American consumers and has been used to increase oil traders’ margins, not meet military needs. AMP urges the Trump administration to conduct a rigorous review of the national defense justification for each and every waiver request and to carefully assess the availability of U.S. vessels before allowing a foreign vessel to move cargo between U.S. ports. AMP also underscores the importance of ensuring that any foreign vessel granted a waiver to meet a genuine national defense need for which a U.S. vessel is not available complies fully with all other applicable U.S. law, including tax, immigration, labor, etc. This is essential to putting American workers and taxpayers first.”
“The administration extended a waiver that has already failed,” said Aaron Smith, president and CEO of the Offshore Marine Service Association (OMSA). “Months in, Americans still aren’t seeing a dime of relief at the pump. Meanwhile, American mariners, vessel operators, and shipyards keep paying the price for a policy that was never going to work and has never worked. Every extra day this waiver stays in place is another day of work shipped overseas and another day of uncertainty for the U.S. maritime industry.”
