Trump Extends Jones Act Exemption by 90 Days... Switches from Blanket to Case-by-Case Approvals

Longest-Ever 240-Day Suspension Implemented
Concerns Over High Oil Prices and Upcoming Midterm Elections
Compromise Policy Amid Pushback From Shipping and Shipbuilding Industries

The Donald Trump administration has extended the exemption period for the “Jones Act,” which restricts cargo transportation between ports to U.S.-flagged vessels, by an additional 90 days. Despite opposition from Republican lawmakers and the shipping and shipbuilding industries, the administration prioritized the issue of high oil prices as more urgent. However, moving forward, the government plans to implement stricter approval criteria, including granting exemptions on a voyage-by-voyage basis.

U.S. Government Extends Jones Act Exemption by 90 Days

U.S. President Donald Trump (center), Robert F. Kennedy Jr., Secretary of Health and Human Services (right), and Jamie Franklin held a signing ceremony for a vaccine-related executive order in the White House Oval Office on the 10th (local time). Photo by AP Yonhap News

According to CNBC and Bloomberg News on the 10th (local time), the White House announced that it would extend the Jones Act exemption by 90 days, maintaining it until mid-November. President Trump first suspended the application of the Jones Act for 60 days on March 17—less than three weeks after the U.S. and Israel attacked Iran—then extended it for another 90 days in May. As a result, the total exemption period now stands at 240 days, setting a new record.

This time, however, the exemption was limited to the transport of gasoline, jet fuel, crude oil, naphtha, liquefied natural gas (LNG), soybean oil, and fertilizers. In addition, the U.S. Department of Defense, in consultation with the Federal Maritime Administration (MARAD), will review and approve exemption applications case by case, taking into account the availability of U.S.-flagged vessels. This is seen as a compromise, considering some Republican lawmakers and industry opposition from the U.S. shipping sector.

Enacted in 1920, the Jones Act requires that vessels transporting cargo between U.S. ports must be built in the United States, fly the U.S. flag, be U.S.-owned, and be crewed by U.S. citizens. The latest extension was implemented as international oil prices rose again due to the Iran war, and U.S. oil reserves have fallen to their lowest levels in decades. Some analysts suggest that ahead of the November midterm elections, the Trump administration was mindful of voter sentiment regarding inflation.

Bloomberg, citing government data, reported that foreign vessels transported cargo to and from U.S. coastal ports 230 times under the exemption. The conservative think tank Cato Institute estimates that about 55 million barrels of cargo were shipped under the exemption during this period. The White House has repeatedly emphasized that domestic shipments of gasoline, diesel, and jet fuel have significantly increased. Kevin Hassett, White House National Economic Council (NEC) Director, also defended the Jones Act exemption as one of the administration’s measures to address high oil prices.

Shipping Industry Pushback... Calls for Repeal Gain Momentum

Oil tanker passing near the Strait of Hormuz in 2018. Photo by Reuters and Yonhap News.

The U.S. shipping industry views the introduction of case-by-case reviews for exemptions as a positive step but maintains its stance that the Jones Act exemptions threaten domestic jobs and the shipbuilding industry without actually lowering fuel prices. Jennifer Carpenter, President of the American Maritime Partnership (AMP), stated, “The exemptions have not lowered fuel prices for U.S. consumers and have instead increased profit margins for oil traders.” The Shipbuilders Council of America (SCA) also argued that any future exemptions must be allowed only when there is a strict and proven national security need.

Similar arguments have been made by some members of the Republican Party. Mike Johnson, Speaker of the House and Republican, along with Steve Scalise, House Majority Leader, and 52 other Republican representatives, sent a letter to President Trump on the 1st of last month, urging that the Jones Act suspension be ended as originally scheduled in the coming month. They contended that “the current exemption is being exploited by adversarial nations as a loophole to undermine America’s maritime supremacy,” and insisted that “for the sake of the U.S. maritime industry and national security, the exemption should end as planned.”

Conversely, there are also calls to abolish or revise the law itself to better suit today’s circumstances, going a step beyond simply extending the exemption. Michael Bloomberg, founder of Bloomberg LP, argued in an op-ed for Bloomberg News on the 6th that Congress should repeal or ease restrictions in the law, citing the increase in domestic maritime oil product transport during the period of the Iran war under the Jones Act exemptions.

The Cato Institute also deems the Jones Act an outdated protectionist policy, arguing that mandating the use of U.S.-built ships and U.S. crews has driven up transportation costs and weakened U.S. maritime competitiveness. They contend that banning foreign ships from operating in domestic waters is not an effective way to revitalize the shipbuilding and shipping industries. The Atlantic Council likewise asserted in a report last month that the requirement for U.S.-built vessels should be abolished to strengthen America’s limited maritime transport capacity.

This content was produced with the assistance of AI translation services.