Key facts
- The White House is expected to extend a waiver of the Jones Act in the coming days.
- The Jones Act mandates that cargo between U.S. ports must be transported on U.S.-built, U.S.-owned, and American-crewed ships.
- The waiver aims to reduce gasoline prices by enhancing shipping flexibility and alleviating transport bottlenecks.
- The current waiver is set to expire on August 16.
- President Donald Trump has publicly criticized oil companies for high profits.
The White House is reportedly preparing to extend a waiver for the Jones Act, a regulation that mandates the use of U.S.-built ships for domestic shipping. This move is seen as an effort to mitigate rising gasoline prices, which have become a point of political pressure for President Donald Trump ahead of the midterm elections.
The Jones Act, in place for over a century, requires that cargo transported between U.S. ports be carried on vessels constructed in the U.S., owned by American companies, and operated by American crews. The waiver aims to increase the availability of shipping capacity and reduce transportation costs for fuel.
Sources indicate that the administration has been in discussions with maritime industry representatives and lawmakers regarding potential modifications to the waiver, seeking to balance the need for fuel supply flexibility with concerns about the domestic maritime fleet. The current waiver, which has been extended multiple times and used nearly 200 times over four and a half months, is set to expire on August 16.
President Trump has publicly criticized major oil companies like Exxon Mobil and Chevron for their profitability, suggesting they should lower prices for consumers. However, options for directly reducing gasoline prices are limited. Experts like Bob McNally of Rapidan Energy Group suggest that while the Jones Act waiver can help, its impact on gasoline prices is likely to be minimal, perhaps only a few cents per gallon.
Critics of the waiver extension, including maritime industry groups like the American Maritime Partnership and the American Waterways Operators, argue that it benefits foreign operators and energy companies at the expense of the U.S. maritime industrial base. They are advocating for geographic restrictions and stricter oversight of shipments. Conversely, some Republican lawmakers, such as House Speaker Mike Johnson and House Majority Leader Steve Scalise, have expressed concerns that broad waivers could weaken the domestic fleet and compromise national security objectives associated with the Jones Act.