Who’s Really Celebrating the 100th Anniversary of The Jones Act?
June 5, 2020 marked the 100th anniversary of The Jones Act.
While most American citizens have likely never heard of it, it affects every single one of us. It is a law that requires goods that are picked up at one U.S. port to be transported to another U.S. port – such as from Portland, Oregon to Los Angeles, CA – on a Jones Act compliant ship; a ship that is built, owned, and operated by U.S. citizens or permanent residents. As a part of the Merchant Marine Act of 1920, the Jones Act resulted in maintenance of the American Merchant Marine.
A Jones Act compliant ship is a ship that is made in the U.S., crewed by U.S. citizens, owned by U.S. citizens, and registered under the U.S. flag. Now we’re not talking about barges and tugboats; we’re talking about commercial ocean ships.
Take a look at what this means. Recently Puerto Rico wanted to buy natural gas from a port in Louisiana. But since there are no Jones Act compliant ships that can carry natural gas, they would have had to use a ship that was built outside of the U.S. (a non-compliant Jones Act ship). So, Puerto Rico petitioned President Trump for a waiver. Keep in mind, the sale of natural gas from Louisiana to Puerto Rico would have created hundreds of good jobs for Americans. And the president was almost going to sign the waiver. But the shipping companies found out and sent in their lobbyists to prevent him for doing so.
Then, senators from Alaska and Hawaii, the two states most affected by the Jones Act, encouraged President Trump not to sign even though the cost of living for residents of Alaska and Hawaii would be much lower if the Jones Act were repealed. The senators of Alaska and Hawaii should have been against the Jones Act on that basis alone. However, the senators opted to betray the citizens they represent in order to secure the big donations they get from the shipping companies.
President Trump, who campaigns as “the Jobs President”, declined to sign the waiver to appease the senators; in so doing, hundreds of jobs were sacrificed. In addition, not signing the waiver allowed the Shipping companies to continue to charge exorbitant fees and required Puerto Rico to buy its natural gas from Russia at a higher cost. All of this because of government regulations.
But there’s more. According to the Philadelphia Shipyard’s 2018 annual report, the Jones Act fleet of ships totals about five dozen tankers and cargo vessels. Because of all the regulations and taxes, it costs more to build a Jones Act compliant ship in America than it does in other countries which helps explain why the U.S. makes about two to three ships a year. China makes 4,000 ships, South Korea makes 2,300, Japan makes 1,600, and Vietnam makes 300 a year. And we make 2 or 3! Other countries have a real ship building industry – we have a hobby.
In the world, there are over 58,000 ocean going ships. America has 97. That is less than one fifth of one percent all the ships. The country claiming to be “the land of the free and home of the brave” is actually the land of the regulated and home of the afraid.
In a GCCR country there will be no Jones Act or anything like it. With no regulations or taxes, a GCCR will be the most cost-effective place to build ships. A GCCR can be positioned to have the largest ship building industry in the world because it can out compete every other country with taxes, regulations, permits, licenses, and bribes. Without any of those prohibitors, a GCCR can compete and win in the ship building and ocean transport industries.
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