The Ohio chemical and oil products tanker unloads cargo at the Port of Long Beach, California, on May 7. (Tim Rue/Bloomberg)
key takeaways:
- Trump administration officials are considering expanding Jones Act exemptions that have eased domestic shipping restrictions for energy products amid disruptions linked to the renewed conflict in Iran.
- Supporters say the exemption helped prevent fuel shortages and price increases, with at least 172 coastal transits completed under the exemption.
- Trump has not decided whether to renew the waiver, while shipbuilders and 52 House Republicans have urged the administration to let it expire. Leave your feedback on BizChat
Trump administration officials are pushing ahead with plans to expand shipping exemptions that make it easier to move oil, fuel and fertilizer around the U.S., as renewed war in Iran raises the prospect of prolonged supply disruptions.
White House and administration officials this week discussed a possible extension of the Jones Act waiver, which is set to expire next month, according to people familiar with the matter. The people spoke on condition of anonymity to discuss private deliberations. President Donald Trump has not yet made a decision on renewal.
At issue are requirements under a 1920 law that goods transported by water between domestic ports must be carried on American-flagged, built, and owned vessels. Under the current relaxations, those restrictions have been removed for coal, crude oil, refined petroleum products, natural gas, natural gas liquids, fertilizers and other energy derivatives.
Trump first granted relief for about 659 products in March, then extended it a month later, amid pressure from oil and chemical industry executives who argued it helped open new routes to move critical goods across the US.
A White House official said no decision had yet been made on the waiver extension, and any further announcements would be made directly by Trump or the administration. Meanwhile, the administration is regularly monitoring how the exemptions are being used, the official said, crediting Trump’s decision to temporarily ease the requirements for helping prevent supply chain shortages across the country.
Supporters say the waivers have helped ensure refineries are well supplied with crude, even though millions of barrels of oil a day are unable to reach markets because of the ongoing fighting around the Strait of Hormuz. Proponents of the rebates argue that this, in turn, helped keep gasoline and diesel prices from rising higher.
The costs are a serious concern for the White House ahead of the midterm elections in November, which could hinge on Americans’ views of the economy. A person familiar with the matter said the resumption of military attacks in Iran – and the ongoing struggle to move goods through Hormuz – has added further pressure to expand.
According to US government data, the exemption has been used by multiple ships for at least 172 coastal transits so far. This includes an increase in otherwise scarce shipments from the Gulf Coast to the West Coast, as well as deliveries of U.S. liquefied petroleum gas to Puerto Rico.
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But that activity has also revived a debate about the merits of the law and concerned shipbuilding interests, which have appealed to Trump to reverse course. They argue that the blanket exemptions weaken Jones Act protections designed to preserve American sea power and American shipbuilding capacity.
Earlier this month, 52 congressional Republicans — including House Speaker Mike Johnson (R-La.) and House Majority Leader Steve Scalise (R-La.) — asked Trump to let the existing exemptions expire. Many of those MLAs represent coastal districts that are home to major shipbuilding facilities. Advocates have also encouraged the administration to at least reduce the scope of the exemption if it is renewed.
