The law’s negative effects do not end there. Puerto Rico, which has no overland route to the rest of the US, pays a particularly heavy price, because only a handful of Jones-compliant ships regularly serve the island. Whereas the neighboring Dominican Republic buys oil from the US, shipments of imported supplies from Venezuela and other countries cost Puerto Rico less (even though US-sourced oil itself is cheaper). And when Hurricane Maria devastated the island in 2017, US President Donald Trump authorized only a ten-day waiver of the Jones Act – not long enough for some foreign-owned ships to bring much-needed aid.
Subjecting Puerto Rico and other US territories and states to higher shipping charges serves no useful purpose and discriminates against fellow Americans. And with foreign ships and crews entering US ports every day, it makes no sense to argue that commercial sailors should be American for national-security reasons. Environmentalists, too, ought to be outraged, given the costly and unnecessary damage resulting from increased CO2 emissions.
Having destroyed US merchant shipping over the past 99 years, the Jones Act needs to be repealed. Ships plying US waters should be obtained wherever they are cheapest. And without protectionist laws, America’s shipbuilding industry might well start rationalizing and become more competitive.
The longer the Jones Act remains on the books, the more expensive US commercial shipping will become and the further it will decline. Rather than celebrating the centenary of a damaging protectionist law, policymakers should throw it overboard.
Anne O. Krueger, a former World Bank chief economist and former first deputy managing director of the International Monetary Fund, is senior research professor of international economics at the School of Advanced International Studies, Johns Hopkins University, and senior fellow at the Center for International Development, Stanford University.