Skip to content
Subscriber Only

U.S. Law Restricting Foreign Ships Leads to Higher Gas Prices

An unkillable law restricting foreign vessels leads to higher gas prices
A Jones Act-compliant oil tanker, built in 2012
A Jones Act-compliant oil tanker, built in 2012Photograph by the Press-Register/Landov; Data: Valero

When large container ships filled with bicycles and sleeper sofas leave China for the U.S., they don’t stop in Hawaii to unload cargo bound for that state before continuing to Los Angeles or Seattle. Under a 93-year-old U.S. law, the Jones Act, only U.S.-made, U.S.-flagged ships can deliver goods between U.S. ports. If a Chinese ship stopped in Hawaii to drop-off cargo, and then picked up, say, a load of Hawaiian coffee, it could not unload that coffee in another U.S. port. Chinese-made goods to be sold in Hawaii are routinely unloaded on the West Coast, and then loaded back onto another U.S. ship for the 2,500 mile trip back to the island state.

Passed in 1920 by isolationist lawmakers, the act was meant to protect the nation’s shipping industry from foreign competition and ensure the U.S. maintained a strong naval presence. For most of its existence it went largely unnoticed, and outside of wasting a lot of fuel and making products in Hawaii needlessly expensive, its impact on the broader U.S. economy was muted.