Rethinking the Jones Act: Reducing Economic Burdens for Puerto Rico, Alaska, Hawaii, and Other Isolated U.S. Regions

Economy
1

The Jones Act, formally known as the Merchant Marine Act of 1920, requires that all goods transported by water between U.S. ports be carried on ships that are U.S.-built, -owned, -crewed, and -flagged. While it was originally intended to support a strong merchant marine for national security and economic reasons, its impact on states and territories like Puerto Rico, Alaska, Hawaii, and other locations reliant on shipping has sparked significant debate.

Critics argue that the Jones Act has become a major obstacle for these regions, driving up costs for essential goods, fuel, and other supplies. Since these areas are geographically isolated and heavily dependent on imports, they face higher shipping costs than mainland states, a burden that directly impacts local economies and residents’ cost of living. Goods arriving from foreign countries must first go to a U.S. port, where they’re loaded onto a compliant vessel, adding unnecessary steps, delays, and increased prices. For Puerto Rico, this has translated into higher prices for everyday goods like food, fuel, and construction materials, exacerbating economic struggles and limiting options for economic growth.

Abolishing the Jones Act for these regions could help reduce the cost of imported goods, stimulate local economies, and provide quicker access to resources. It would allow foreign-flagged ships to transport goods directly between foreign countries and Puerto Rico, Alaska, or Hawaii without routing through the mainland or relying on expensive U.S.-flagged ships. Proponents of repeal also argue that the U.S. shipbuilding industry hasn’t significantly benefited from the Act and that removing it would promote competition, lower transportation costs, and bring these regions on par with the mainland in terms of market access.

On the other hand, supporters of the Jones Act cite national security and job preservation within the U.S. maritime industry as critical benefits. They argue that U.S.-flagged vessels are subject to stricter regulations, including labor and safety standards that ensure fair treatment for American workers. Yet, opponents suggest that a targeted repeal for territories and isolated states, rather than a full repeal, could strike a balance by offering relief where it’s most needed without dismantling the law entirely.

For places like Puerto Rico, Alaska, and Hawaii, abolishing or relaxing the Jones Act requirements could be transformative, offering more affordable goods, encouraging economic resilience, and providing a lifeline during natural disasters when fast access to resources is critical. Ultimately, rethinking or amending the Jones Act for these regions may not only boost local economies but also foster a more equitable trade system across the U.S.

1 Like
2

The Jones Act makes things so much more expensive for people of Hawaii.

1 Like
3

Hi Sam, could you explain a bit more about your perspective on how removing the Jones Act would make things more expensive for Hawaii? It’s an interesting viewpoint, and I’d love to understand more.

The general consensus, however, is that the Jones Act actually increases costs for Hawaii and other isolated regions. Since the Act mandates that goods transported between U.S. ports must be on U.S.-built, -owned, and -crewed ships, it reduces competition by limiting shipping to a smaller, costlier fleet of American vessels. This restriction often leads to higher transportation costs because U.S.-flagged ships are more expensive to build and operate than foreign-flagged ships. These costs are then passed down to consumers, making essentials like food, fuel, and building materials significantly more expensive in Hawaii.

A study from the Grassroot Institute of Hawaii in 2019, for instance, estimated that relaxing or repealing the Jones Act could reduce shipping costs by up to 22% in Hawaii. Additionally, the Cato Institute published findings suggesting that shipping a container from Los Angeles to Honolulu is often twice as expensive as shipping the same container from Los Angeles to Asian ports like Singapore or Hong Kong. This discrepancy highlights how the Jones Act contributes to elevated costs for consumers in Hawaii.

In fact, economist Colin Grabow of the Cato Institute noted that “the Jones Act represents a hidden tax that hits Americans in Hawaii, Puerto Rico, and Alaska the hardest” by inflating the costs of goods in areas reliant on imports. Removing or adjusting the Jones Act could open Hawaii’s shipping market to more affordable international vessels, increase competition, and drive down prices for consumers—making everyday goods and services more affordable for the people of Hawaii.

4

Please add Guam to the list of territories under the Jones Act. Guam also suffers from the high cost of importing goods the the island.

To add to this, I lived in Hawaii for over 30 years. The democrats and Matson shipping are all tied together. Especially in Hawaii. eliminating or modifying the Jones act will be like pulling teeth from the tiger. Modifying the Jones act for this state and the territories will cost Matson shipping and the democrats in Hawaii lots and lots of cash. The island, Alaska and territories are a cash cow for Matson Shipping.

1 Like
5

Yes, Guam would be considered as “Other Isolated U.S. Regions”.

6

You misunderstand. The JONES ACT makes things EXPENSIVE for people of HAWAII. REPEL the JONES ACT!

1 Like
7

Apologies. I misread.

8

I propose that we update the act to combat the subsidies that foreign counties give to their shipbuilders. Instead of given in to them, we should penalize this behavior. We need to use tariffs and fees to combat this uncompetitive practice.

1 Like