Jones Act Establishes Shipping Protectionism Still Harming Consumers Today

President Woodrow Wilson signs the Merchant Marine Act of 1920, commonly known as the Jones Act after its sponsor Senator Wesley Jones of Washington, mandating that all goods shipped between U.S. ports must be transported on ships that are American-built, American-owned, and American-crewed. The law creates a captive market for the domestic shipbuilding industry and maritime unions while dramatically increasing shipping costs for consumers, particularly in Hawaii, Alaska, Puerto Rico, and other non-contiguous U.S. territories entirely dependent on maritime transport.

The Jones Act exemplifies how regulatory frameworks created for ostensible public purposes become permanent corporate welfare. Proponents argue national security requires maintaining domestic shipbuilding capacity and trained American mariners for wartime mobilization. However, the resulting industry proves uncompetitive: by the 21st century, only 99 Jones Act-compliant ships remain, and American shipyards cannot construct vessels at internationally competitive prices. The protected industry produces fewer ships at higher costs rather than developing competitive capacity. Maritime unions support the law for protecting American jobs, but the industry’s decline means fewer total maritime jobs than would exist with a competitive sector.

The costs fall heavily on captive island populations who cannot receive goods from foreign-flagged vessels even when such shipping would be vastly cheaper. Puerto Rico, Hawaii, and Alaska pay substantially higher prices for goods than comparable markets with access to international shipping. During natural disasters, Jones Act restrictions have been temporarily waived to allow foreign vessels to deliver relief supplies - demonstrating that the law impedes rather than ensures supply resilience. The Jones Act endures for over a century because its concentrated benefits to shipbuilders and maritime unions outweigh its diffuse costs to millions of consumers, illustrating how regulatory capture persists when beneficiaries organize politically while victims remain dispersed.