Trump Administration Considers Jones Act Waiver

The Trump administration is considering waiving the century-old Jones Act for a limited period to ensure energy and agricultural shipments can move freely between U.S. ports, press secretary Karoline Leavitt said on Thursday, in a bid to combat Iran-related supply disruptions.

"In the interest of national defense, the White House is considering waiving the Jones Act for a limited period of time to ensure vital energy products and agricultural necessities are flowing freely to U.S. ports," Leavitt said in a statement.

"This action has not been finalized," she added.

Under the Jones Act, goods shipped between U.S. ports must be carried on vessels that are U.S.-built, U.S.-flagged and mostly U.S.-owned. The requirement sharply limits the number of tankers available for domestic shipments but is strongly supported by maritime labor unions.

The announcement of a 30-day waiver could come as early as Thursday, two sources familiar with the effort told Reuters, and would be aimed at combating spiking fuel prices and other disruptions since the start of the U.S.-Israeli war on Iran.

High gasoline prices carry significant political risks for President Donald Trump and fellow Republicans, who have long argued that their energy policies would keep fuel affordable for American consumers.

A sustained rise in pump prices could undermine that message and fuel criticism from Democrats that the administration has failed to shield households from higher costs, particularly as voters remain sensitive to inflation ahead of the November midterm elections.

U.S. national average retail gasoline prices hit $3.60 a gallon on Thursday for the first time since May 2024, while diesel prices hit $4.89 a gallon, the highest since December 2022, data from the motorist association AAA showed.

Trump has been reviewing ideas to tame energy prices, but analysts and energy experts say he has few meaningful options as long as Iran continues to attack oil tankers in the Strait of Hormuz, the narrow waterway off the coast of Iran through which roughly one-fifth of the world’s oil normally flows.

SLOWING PRICE INCREASES

Waiving the rule temporarily would allow foreign ships to carry fuel between U.S. ports, potentially lowering shipping costs and speeding deliveries. 

But seven maritime labor unions slammed the idea of a waiver, saying that crude oil prices rather than shipping costs were the primary driver of gasoline prices.

In a letter, they said a waiver would benefit "foreign-flag operators that avoid paying U.S. taxes, rely heavily on low-wage labor, and operate under regulatory regimes that circumvent international labor and vessel safety standards in direct conflict of America’s national security and economic interests," the letter said.

Patrick De Haan, an analyst with fuel price tracker GasBuddy, said a waiver could help slow increases in import-reliant regions like the West Coast and Northeast, but the overall price trend would continue to be dictated by developments in the Middle East.

"On a daily basis, the waiver might slow price increases by around a nickel a gallon," De Haan said.

The largest U.S. farm lobby, the American Farm Bureau Federation, asked Trump in a March 9 letter to waive the Jones Act to improve domestic transportation capacity, warning of fertilizer price spikes for farmers caused by shipping disruptions through the Strait of Hormuz.

The United States has issued Jones Act waivers in the past only sparingly, typically in response to major supply disruptions.

The most recent waivers came after hurricanes such as Hurricane Harvey and Hurricane Maria in 2017. At the time, the U.S. Department of Homeland Security temporarily allowed foreign-flagged vessels to transport fuel between U.S. ports to ease shortages and speed deliveries to affected regions.

(Reuters - Reporting by Jarrett Renshaw; Additional reporting by Shariq Khan; Editing by Richard Valdmanis, Chizu Nomiyama, Deepa Babington and Cynthia Osterman)