Abstract
Amid the spike in oil prices and the impact on international supply chains sparked by the Iran War, the Trump Administration announced a 60-day waiver of the Jones Act to “mitigate the short-term disruptions to the oil market” and “allow vital resources like oil, natural gas, fertilizer, and coal to flow freely to U.S. ports.” The Jones Act is a century-old law that prevents foreign-built, -owned or -operated vessels from shipping between ports in the United States, limiting competition in that type of transportation. The Jones Act has been waived multiple times over the years, including during the devastation that followed Hurricane Maria in Puerto Rico in 2017, when the scarcity of Jones Act-compliant vessels limited the movement of relief aid to that island from the United States mainland. The effects of this Act at a time of acute crisis highlight a more general consequence of protectionist policies that endures over time; benefiting a small number of producers by raising costs and limiting choice for a vastly larger group of consumers. Nonetheless, the cost savings from the temporary suspension won't significantly affect gasoline prices.