To The Moon

The 150-day temporary waiver for the U.S. government's enforcement of the Jones Act is set to expire on August 15th, sparking intense debate in American political and industrial circles over the future of the legislation. Recent official data reveals that in the 90 days following the Trump administration's suspension of the act in March—a move prompted by escalating U.S.-Iran conflict and surging energy prices—foreign-flagged vessels transported over 31 million barrels of fuel and chemicals within U.S. domestic waters, temporarily reshaping the nation's energy logistics landscape.

Enacted after World War I, the Jones Act mandates that vessels carrying cargo between U.S. ports must be American-built, American-owned, and fly the U.S. flag. Due to the extremely limited size of the compliant fleet, this law has long contributed to significantly higher shipping costs for cross-regional transport within the United States. In March, U.S. military airstrikes on Iran triggered a sharp spike in global oil prices. To curb soaring domestic energy costs, the Trump administration took the rare step of announcing a 150-day temporary waiver of the act, permitting foreign-flagged ships to operate in the U.S. domestic shipping market.

Latest operational data from the U.S. Maritime Administration shows that during the first 90 days of the waiver, refined petroleum products—including gasoline, diesel, and jet fuel—comprised 67% of the cargo transported by foreign-flagged vessels, with crude oil accounting for 26% and the remainder consisting of propane, fertilizer, and asphalt. In terms of supply chain flow, over 70% of cross-regional shipments originated from the Gulf Coast region, which houses more than half of the nation's refining capacity, with California—a state heavily reliant on Persian Gulf crude and home to the highest fuel prices in the country—being the primary destination. During this period, refined products from Texas and Louisiana were transported to California on a large scale via foreign-flagged vessels for the first time, even creating short-distance reverse flows of crude and refined products within California itself (between Los Angeles and San Francisco). Additionally, Puerto Rico and Alaska, both long burdened by high electricity prices due to the act, received 19 and 4 shipments of energy supplies, respectively, carried by foreign vessels.

Despite arguments from interest groups opposing the Jones Act and major energy multinationals like Phillips 66 that the waiver policy successfully achieved "the substitution of domestic crude for imported crude" and effectively unlocked flexibility in the domestic supply chain, the policy has faced strong resistance from the U.S. shipbuilding industry and bipartisan members of Congress.

Proponents of the act argue that the Jones Act is a legal cornerstone protecting the U.S. domestic shipbuilding industry from unfair low-price competition and safeguarding the U.S. military's strategic logistical framework. U.S. Representative Salud Carbajal publicly expressed concerns during a Maritime Administration budget hearing, stating that extending the waiver period would unnecessarily make U.S. economic security dependent on foreign shipowners and crews. This Tuesday, 52 Republican members of Congress sent a joint letter to Trump urging him not to extend the waiver beyond its August 15th expiration. Lawmakers supporting the shipbuilding industry also contend that lifting the act's restrictions has not led to a significant drop in retail gasoline prices at U.S. fuel stations, but instead has undermined the nation's defense security foundation.