How the Jones Act enriches Russia
It came as a shock to some folks to learn that the U.S. imports oil from Russia. How could this be? It must be Joe Biden’s fault, right? One of the biggest reasons why the Kremlin’s oil is making its way to the U.S. is all due to a 100 year-old federal law — the Jones Act — that makes transporting goods by ship in the U.S. very expensive. And it’s not just oil, but wheat, natural gas, and a lot of other products the U.S. produces in abundance. As the Washington Examiner’s Jeremy Lott writes:
Critics charge that because of the Jones Act, Russia and other nations end up supplying natural gas to New England in cold winters; the American shipbuilding industry has been reduced to more of a hobbyist pursuit. As a result, Hawaii, Puerto Rico, Guam, Alaska, and other far-flung locales have developed closer trade ties to other countries than the mainland.
“A Taiwanese ship leaves Taipei for Los Angeles. On its return trip, a shipper asks if it can drop off cargo in Hawaii on the way,” writes Joe Kent, executive vice president of Hawaii’s Grassroot Institute, who grew up on the Big Island.
“The answer,” he says, “is no.” The reason? “The leg from Los Angeles to Hawaii is an interstate trip rather than an international trip.”
The Jones Act applies, meaning the ship would have to be American-built, fly a U.S. flag, and be maintained by a crew of at least 75% American citizens.
“Hawaii has one of the highest costs of living in the nation,” Kent points out, and he blames the Jones Act for a lot of that burden. He shows how the act’s effects incline Hawaiian business away from more commerce with the continental U.S. commercially.
“Because of the Jones Act, many American ranchers buy grain from Canada or Argentina rather than U.S. farmers. Similarly, it makes more sense for Hawaii ranchers to transport cattle to Canada, rather than waiting for a Jones Act ship to take them to California,” Kent writes.
And it’s not likely to get better soon. Kent observes, “The fleet of U.S. vessels that comply with the Jones Act restrictions has dwindled from 2,300 in 1946 to less than 100 today, and many of those ships are old and among the most expensive in the world to maintain.”
Only government could make such a system possible. And only government can fix. Time to give the Jones Act a one-way ticket to Davy Jones’ Locker.