How the Jones Act Sparked Calls of Treason

The recommendation, serious or not, underscores a surprising level of intensity around shipping policy.

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A container docks at the port of San Juan, Puerto Rico. (Photo by Joe Raedle/Getty Images)

Good afternoon. Congress is out, so we’ve got a story a little off the beaten path for you today.

The Battle Over the Jones Act

In March 2020, a maritime shipping advisory panel offered a simple suggestion to the government: Charge all past and current members of two libertarian think tanks with treason.

It is certainly not the first time a bunch of libertarians angered members of a bureaucratic panel. But this backlash stemmed from criticism of the Jones Act, a century-old law that imposes requirements for shipping between American ports.

Under the rules, vessels shipping cargo between U.S. ports must be American-built, American-owned, and American-crewed. Proponents say the law ensures a hearty U.S. fleet and shipbuilding industry in times of war or other national emergencies. Critics—especially researchers at several libertarian and conservative institutions—argue the law has insulated American shippers and shipbuilders from international competition, leading to a dwindling and aging U.S. merchant fleet and higher prices for consumers. 

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  1. Avatar photo
    Larry

    Pete Buttegieg defending the Jones Act in his confirmation hearings
    https://youtu.be/swksb4kWx48

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    Rjosephpaquette

    The Jones act has gone from ensuring a US maritime navy to ensuring high prices and slow changes to an important industry. There must be other ways to encourage US ship building, other than complete exclusion of other foreign ships going between US ports. The Jones act needs modernization, but not scrapping.

    I consider the focus on the 'treason' charges simply nut picking.

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  3. R. James

    While I think the advisory committee's request to charge opponents of the Jones Act with Treason is absurd and should not be in an official document of the US government even as a joke, I do believe preserving the Jones Act is vital to national security. Especially given the high likelihood that the US could find itself in a maritime war west of Wake with a peer opponent in the next 5 to 15 years, protecting the domestic shipping and shipbuilding industry is essential to mobilizing for such a war, rapidly increasing the size of the fleet, and providing the logistics necessary to win it.

    There are better ways to expand the existing fleet then repealing the Jones Act, such as congressional funding for defense spending to build and contract more logistic ships, defense spending for repairing and upgrading our aging battle fleet, spending to build more repair and maritime logistic facilities especially in the Indo-Pacific area, and tax breaks and other economic incentives for opening and maintaining domestic shipyards.

    There are better ways to aid hurricane victims then repealing the Jones Act. As has already been proposed by some members of Congress a time limited waiver of the Jones Act for certain areas hit natural disasters is a pragmatic solution that does not expose our national security as would a full repeal of the law.

    Finally, blanket cries of protectionism in opposition to the Jones Act lack nuance. Protectionist policies for its own sake or to improve the domestic economy are wrong. However, Protectionist policies to protect industries vital to national security are necessary and have been used repeatedly throughout American history. In fact, a case can be made that the US' failure to apply protectionist policies to other in industries vital to national security such as missile development and procurement, semi-conductors, computing, drones, 5G and cyber security has already exposed the US national security to harm in any future war with a peer adversary. The Dispatch's Klon Kitchen has made this argument for the cyber and information technology industries. So, I find the Dispatch's pearl clutching at protectionist policies for industry vital to national security while calling for them for another contradictory. The Jones Act should be defended as necessary for the US' national security, especially with a looming conflict with a peer adversary in a theater dominated by the maritime environment.

    A navy cannot be built in a day, and neither can a maritime industry that requires skilled workers and large infrastructure investments. We've spent thirty years ignoring the needs of the Navy and the maritime industry that it relies on for logistical support, reinforcement and repairs. It needs to end, and it might already be too late.

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    BrettH

    Good old protectionism working its magic. Enjoyed the read, thanks Haley.

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    Phil H

    The Jones Act should be scrapped. It seems clear that the domestic merchant marine fleet it was intended to support is not robust enough to be a critical support to US national security. There need to be better ways to support a US merchant marine fleet, but first the Jones Act has got to go.

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    1. R. James

      You don't offer a solution. You suggest killing the US merchant marine fleet because it is weak now and figure out how to replace it later. Given the national security situation west of Wake; the shear enormity of the Indo-Pacific theater; the sorry state of our battle fleet, logistic and repair auxiliaries, and shipyards; we cannot afford to figure it out later. There is no time to figure it out later. We have already seen in Ukraine what happens when you show weakness and a lack of readiness to an expansionist authoritarian dictatorship. To gut the Jones' Act and show the CCP that the US lacks the ability and the will to preserve, let alone increase, our maritime forces, will basically signal to them that their best opportunity to invade Taiwan is now.

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        Rjosephpaquette

        Scrap the Jones act, and then couldn't the US government commandeer foreign ships in our ports in a time of crisis?
        I believe historically that was what happened.

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      2. Avatar photo
        Phil H

        I'm not all that concerned with the merchant marine fleet as such, seeing as how the Jones Act has allowed it to become old and inefficient and therefore less a national asset. The bigger problem is the rise in costs imposed by the jones Act. But this article holds out hope that removing the Act will incentivize the US merchant marine to become more competitive with the rest of the world.
        If there are specific scenarios that require national security support (sea transport of military equipment comes to mind) that can be specifically supported.

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        1. Avatar photo
          Tmcke

          sorry but removing the jones act will not "incentive the US merchant marine" to become more competitive. It will reduce the merchant marine to a cipher.

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  6. Michael Hartley

    From Congressional Research Service: the main policy goals established by Congress in the Merchant Marine Act of 1920 (aka Jones Act) is to have a merchant marine "sufficient to carry the waterborne commerce" and "capable of serving as a naval and military auxiliary in time of war or national emergency."
    The Jones Act, as amended and interpreted through the years, may well be inadequate to these purposes. But that does not mean the purposes are invalid.
    Criticism of the Jones Act might be better received if it was accompanied by the critic's perception of the national need for a merchant marine. If the critic's aim is merely to tear down the Jones Act and put nothing in its place but "the free market," well, again from the CRS, that has never been the case from the earliest days of our republic, and it seems doubtful policy to make it so now.
    A maritime nation requires both a navy and a merchant marine -- and not necessarily in that order. To put the question another way, Why have a navy if we don't have a merchant marine?
    If you are against the Jones Act, what, if anything, would you put in its place?

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    1. Brewh

      ARLINGTON, Va. – The American defense maritime industrial base has atrophied to a point where the United States builds less than 1 percent of the world’s ocean-going fleets and has less than 4 percent of the world’s licensed mariners while China establishes itself as a maritime nation, Military Sealift Command’s top officer said Tuesday

      https://news.usni.org/2022/10/18/were-ignoring-the-problem-of-stressed-u-s-maritime-infrastructure-says-msc-commander?mc_cid=25d913777a&mc_eid=dfaf0ecab2

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    2. Avatar photo
      Bean

      >To put the question another way, Why have a navy if we don't have a merchant marine?
      Because of the massive benefits we get from other people's merchant marines. 90% of everything moves by sea. Also because navies have other jobs these days. https://www.navalgazing.net/On-the-Border-of-Land-and-Sea

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      1. R. James

        And because our domestic economy depends on free and open maritime trade.

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      2. Daspenceman

        Bean, you subscribe to The Dispatch? That's awesome! I've loved reading Naval gazing for a long time. Good to see you here.

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      3. Michael Hartley

        So, in your reckoning, it's not important for us to have the means to move our own supplies in time of armed conflict or during other national emergencies.
        I understand we receive substantial benefits from other merchant marines. I'm not sure those benefits deserve the characterization as "massive." I'm reluctant to accept that a strategic purpose of the USN is to make the oceans safe for third-world shipping to the neglect of our own.

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        1. Tom Doniphon

          The Navy's job is to maintain freedom of the seas. It is certainly not to protect domestic shipping from competition.

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          1. R. James

            Protecting domestic shipping from competition ensures that domestic shipping, shipbuilding and repair facilities exist and are robust enough to draft in times of large-scale maritime war to increase, supply, repair and operate auxiliary ships in support of our Navy. This is why the Jones Act exists. Look at the mobilization during WWII from 1941 to 1945 and shear enormity of logistics necessary to operate a large war in the Pacific theater, how much of that was on the backs of domestic industry? How can that be done when there is no domestic maritime industry? Nor can the skilled workers and infrastructure necessary for a domestic maritime industry be built in the short term.

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          2. Michael Hartley

            Good point. But I think the question still remains to what extent is an American-flag merchant marine integral to our naval strategic interests.

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        2. Avatar photo
          Bean

          First, it depends on your definition of "our own supplies". Are we talking the supplies for the military, or America's oceanic trade in general? Because the Jones Act is doing neither. Our merchant marine is tiny, and trades almost entirely on Jones Act routes because it can't possibly compete on other routes. It's too small even for military supplies, which is why the US government has a bunch of cargo ships for the job, split between MSC and the NDRF. (See https://www.navalgazing.net/Military-Sealift-Command-Part-2)

          If the law has failed even by the metrics its proponents set for it, it's probably time we get rid of it.

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          1. Avatar photo
            Bean

            @R. James

            I get the idea behind the Jones Act. It just hasn't worked. Right now, something like 75% of shipbuilding spending in the country is from the military. There is exactly one yard building large civilian ships, and it gets most of its money from the Navy. We do not have the reserve the Jones Act is supposed to preserve. I bow to very few in knowledge of the Navy, and cannot see how repealing the Jones Act would actually damage national security.

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          2. R. James

            It more than just what is currently used to supply the existing fleet during peace time. It is a fleet reserve to mobilize in times of war with a peer adversary. It is for shipbuilding to expand the combat fleet and replace combat losses. It is for repair to damaged ships in combat swiftly enough to return them to the fight when they're needed. It is to supply the logistical needs of a fleet capable of winning a war against a peer adversary on two fronts. It is also to preserve the skilled workers and sailors necessary to mobilize to build, repair and operate that fleet. You need to stop evaluating the Jones Act based on the needs of a peace time Navy which has atrophied at the service of a nation which has spent twenty years at war in a desert; and look at it from the perspective of what a wartime Navy would need to draw from to win a peer conflict on two fronts, one of which stretches over 100 million square miles, seventy percent of which is water.

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          3. Avatar photo
            Bean

            I don't think there's any law which can accomplish all of those things, and several of them work against each other. If we want more merchant mariners and more ships under the US flag, the obvious thing to do is to make ships cheaper by repealing the "US-built" provisions. But that obviously works against the desire for US shipbuilding. Fortunately, that's easy to sacrifice, as we have exactly one yard building large merchant ships, NASSCO in San Diego, and about half of their contracts are for Navy auxiliaries. They'll survive a Jones Act repeal, even if somewhat diminished. Other yards don't make stuff the Navy wants, but that also means their loss doesn't matter too much to national security.

            More broadly, I can see the case for retaining the requirement that US-flagged and crewed vessels perform cabotage, so long as we get rid of the building requirements. That would serve everyone but the shipyards.

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          4. Michael Hartley

            This does get to the heart of the matter. I don't wish to argue for unqualified support of the Jones Act as it exists. I do wish for clear thinking on the importance, or non-importance, to the nation of having a merchant marine capable of carrying at least a significant portion of our waterborne commerce (not just military supplies) and capable of serving our maritime needs in time of war or national emergency.

            I would argue that we should not confuse the "massive benefit" derived from foreign flag shipping with "complete dependency upon." I would argue that MSC and NDRF cannot be expected to function without a merchant marine to draw upon. I would argue that once commercial shipbuilding infrastructure is lost it would be very hard to restore. To those ends, I would support cabotage laws -- while acknowledging the current law is failing Puerto Rico, and failing in other ways too.

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    3. Avatar photo
      JohnM.

      This would be a great question for Scott Lincicome.

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      1. Avatar photostaff-badge-circle
        Scott Lincicome staff-badge Staff

        Lotta misdirection here. We've addressed it all here: https://www.cato.org/project-jones-act-reform

        Or you can read my Dispatch column: https://thedispatch.com/newsletter/capitolism/your-summer-cruise-just-got-cabotaged/

        The main missed point is that the JA is one of the most restrictive cabotage laws in the world, has been law for more than a century, and has presided over the slow, steady destruction of the US Merchant Marine. A freer market would, per multiple analyses, actually BOOST the US shipping industry. If you want a healthy US MM, you want to repeal the JA.

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        1. R. James

          You guys completely ignore the realities of what would be necessary to mobilize the maritime industry for a conflict with a peer adversary in pursuit of economic ideological purity. You cannot mobilize or draft what is not owned by US companies or operated by US sailors or workers. This is not about free market economics; it is about national security. The Jones Act served the country well in the lead up to WWII and it's protecting the US maritime industry from the kinds of out-sourcing and supply chain vulnerabilities threatening other industries vital to national security. How would the US supply our fleet in a conflict with China if all non-navy owned tankers are owned by China? Or even owned by neutral countries? What skilled workforce would the US draw upon to build ships and operate them if the US suddenly had a need to massively expand the battle fleet in a short period of time? Would shipyards outsourced abroad build our warships? Would non-US citizens be drafted to crew the auxiliaries needed to supply the fleet in the next large maritime war? How would the US mobilize domestic private shipyards that are owned and operated by foreign countries? Even if you could, should the Navy entrust the building of a warship to a domestic shipyard owned and operated by China or another foreign adversarial or neutral company? Many warship building plans are classified, and many US domestic contracting jobs require clearances. Given the many stories about Chinese corporate espionage on behalf of the PRC, why should the US open up the maritime shipbuilding and repair industry which our Navy relies on during peacetime and will need to mobilize during war to foreign countries who may be hostile or ambivalent to our national security? The opponents of the Jones Act seem to have not thought through the implications of their proposal on the national security of the country.

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        2. Midge

          Sabotage the cabotage!

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          1. Rob K

            Where can I buy this on a shirt?!

            @Dispatch: please make this a merch item!

            "Sabotage the Cabotage! Sink the Jones Act!"

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        3. Dlwondercheck

          Mic drop!

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        4. Avatar photo
          JohnM.

          Thanks, Scott.

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  7. Avatar photo
    Bean

    Hmm. I recently became very peripherally involved in an attack on the Jones Act with another group. Does this mean I get to be a traitor too?

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    MatthewRobin

    It makes far more sense to charge the supporters, rather than the opponents, of the Jones Act with treason.
    Neither should happen, but just sayin.

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  9. Andrew Z

    I did not have on my bingo card Scott Lincicome being the first member of the Dispatch crew to be accused in a government document of treason.

    In all seriousness, spot on reporting Haley. Hope this gets picked up further.

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  10. Joe

    I'm not familiar with the Jones Act other than this article, but it seems there is something to be said for keeping your country in a position to handle a major war if needed. Prior to Ukraine and recent China behavior, I probably wouldn't have commented. Unfortunately, war is real. I so hoped the threat of war was ever declining but as of recent events, it seems alive and well.

    I don't know if the Jones Act keeps us better prepared or not, but if it does, we should probably think twice before scrapping it.

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    1. Avatar photostaff-badge-circle
      Scott Lincicome staff-badge Staff

      Here you go: https://thedispatch.com/newsletter/capitolism/your-summer-cruise-just-got-cabotaged/

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    2. Genny

      I think we should keep it. There are some things that are more important than cheaper prices, and this is one. We fund our military protective capabilities, so why not this too, if money is the only issue.

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      1. Matt

        I think at very least, we need to figure out a way to 'share the pain' if we really think it's that important. If the Jones Act is really that vital to our national security then it shouldn't just fall on Hawaii/Puerto Rico to fund it.

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      MatthewRobin

      Scott Lincecome does a great job in his newsletter showing how terrible the Jones Act is.
      Read enough of him and you will be convinced.
      https://thedispatch.com/newsletter/capitolism/the-american-made-boot-on-puerto/

      Also, this is a bit longer but it dispels any notion that the Jones Act serves any positive purpose for national security.

      https://www.cato.org/publications/policy-analysis/jones-act-burden-america-can-no-longer-bear

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      1. Avatar photostaff-badge-circle
        Scott Lincicome staff-badge Staff

        Hey don't forget this one! https://thedispatch.com/newsletter/capitolism/your-summer-cruise-just-got-cabotaged/

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