COVID-19 Turmoil Places Renewed Focus

on Costly Maritime Protectionism

In the wake of the COVID-19 outbreak, people—including President Trump—began to discuss the possibility of providing federal assistance to the hard-hit cruise industry. But Cato's Colin Grabow suggested that—rather than handing out taxpayer dollars to these firms—a better idea would be to repeal the Passenger Vessel Services Act or exempt large cruise ships from that law's Jones Act-style requirements. Freeing vessels from the law, according to Grabow, would allow for more efficient operations, boosting the cruise industry's competitiveness. 

Reports also surfaced of oil executives seeking a Jones Act waiver to facilitate the transport of oil to other parts of the country—an idea Grabow also endorsed—noting that it would provide genuine relief while coming at no cost to taxpayers. Cato's Thomas Firey and Peter Van Doren, meanwhile, listed the Jones Act as one of numerous U.S. laws and regulations that should no longer be tolerated in the current environment. 

Other voices also highlighted Jones Act relief as a necessary component of the effort to mitigate COVID-19's economic damage:

• Stanford University economist John P. Taylor called for rescinding the Jones Act.
• Jonathan Williams and Lee Schalk of the American Legislative Exchange Council said the economy would greatly benefit from the Jones Act's suspension.
• The Mackinac Center listed the Jones Act's suspension as one of numerous measures lawmakers should adopt.
• The Heritage Foundation's Nicolas Loris described the Jones Act as a senseless restriction. 

Jones Act Undermines Defense

of Louisiana's Coastline

Louisiana and the Netherlands find themselves engaged in a battle against rising seas. But while both are rebuilding beaches to ward off the encroaching tide, the Netherlands is doing so at a substantially lower cost. As Colin Grabow points out, one important reason for this is U.S. maritime protectionism. Due to the Jones Act and the Foreign Dredge Act, foreign dredging firms cannot offer their services to Americans, who must instead make do with the smaller and less efficient U.S. dredging fleet. Grabow notes that while such laws are typically justified as necessary to protect U.S. shores, Louisiana's experience shows that they literally make it more difficult to defend them.

Jones Act Talk

Cato scholars made the following media appearances in March to discuss the Jones Act:

• Colin Grabow on KFAR radio (Fairbanks, Alaska) program Patriot's Lament.
• Colin Grabow on syndicated radio show Shale Gas News.
• Colin Grabow on the American Legislative Exchange Council podcast Across the States with Dan Reynolds. 

Quick Notes

• Three New Jersey state senators have introduced a resolution in the state legislature calling for Congress and the Trump administration to exempt Puerto Rico from the Jones Act. 
• Reason notes that while Puerto Rico has been exempted from certain "Buy America" requirements for protective medical gear that it is still subject to the Jones Act, which it calls a "particularly absurd restriction."
• Mike Hansen of the Hawaii Shippers Council points out that with direct shipping between Australia/New Zealand and Hawaii no longer available, such shipping must now be done via California. With shipping between the West Coast and Hawaii subject to the Jones Act, Hansen says that "freight costs have increased substantially."
• Dr. Keli'i Akina, president of the Grassroot Institute of Hawaii, highlights a new Cato Institute study that he says makes the green case for Jones Act reform.

We Can’t Make This Up...

According to the U.S. Department of Agriculture (USDA) Puerto Rico has been opting to meet its rice needs by importing from China instead of from the rest of the United States. This, the USDA says, is partially explained by the fact that rice can actually be shipped more cheaply from China than from the U.S. mainland "because of provisions of the U.S. Jones Shipping Act of 1920." 

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