As the war in the Middle East rages, a US law known as the Jones Act, or the Merchant Maritime Act of 1920, comes into the spotlight.
Now, the Trump administration, under pressure from rising oil and gas prices in global markets, has temporarily waived the more than 100-year-old law.
Karoline Leavitt, the White House press secretary, announced in a post that a 60-day waiver has been issued for the Jones Act.
“President Trump’s decision to issue a 60-day Jones Act waiver is just another step to mitigate the short-term disruptions to the oil market as the U.S. military continues meeting the objectives of Operation Epic Fury,” she penned.
Earlier, the Trump administration indicated it would take such steps to curb the steep energy prices. But what is the Jones Act?
The Merchant Marine Act, commonly known as the Jones Act, is the law that regulates the transport of goods from one US port to another.
Congress passed the law in 1920 after Sen Wesley Jones of Washington State sponsored it to rebuild the merchant fleet impacted by heavy German U-boat attacks on U.S. shipping during World War 1.
In addition, the Jones Act protects U.S. shipping by barring foreign-owned ships from trading in U.S. ports, meaning only U.S.-made ships, cargoes, and even American residents are allowed to move from one U.S. port to another.
Now, foreign ships are allowed to carry products to US ports; a question remains: will it curb soaring energy prices?
A report in The Hill presented two studies.
First, by JPMorgan, which predicted that a waiver to the Jones Act could lower the prices to 10 cents per gallon for East Coast drivers.
The second one is the National Bureau of Economic Research working paper, released in 2023, which states that a waiver of the act could reduce the average price by 63% per barrel.