7

Since Hurricane Maria devastated Puerto Rico, there was a growing call to suspend the Jones Act, which imposes protectionist limits preventing any foreign ships from carrying goods between American ports. As a result, prices in Puerto Rico are often significantly higher. Obviously, the need for supplies to reach Puerto Rico is critical, and yet President Trump originally said this

Trump said he was initially considering whether to implement a temporary waiver of the Jones Act to allow it, but decided against doing so as "a lot of people that work in the shipping industry…don’t want the Jones Act lifted."

Today he reversed course and granted a waiver.

The Jones Act seems to be growing in unpopularity and there's clearly a growing push to finally repeal the act. Hawaii chafes under it as well and unsuccessfully sued to get relief from it. It even played a role in the El Faro tragedy a few years ago. So who is still defending this law?

1 Answer 1

4

Your question seems to be built upon an understanding of the Jones act that doesn't mesh with reality. The act has nothing to do with tarrifs, but with requirements for any ship engaging in Cabotage in the United States. It is obviously still protectionist in that it requires the ships to be american made, the crews to be primarily american, and the company operating them to be american owned(fairly certain that the current iteration of the act had requirements regarding the steel used in the ship, as well as steel used in repairs). It has no impact on a Chinese freighter delivering a boat load of goods to Puerto Rico, or Hawaii for that matter, at least when the origination point is not a US port.

Despite John McCain's talk of huge price differences in Puerto Rico due to the act, the world bank's data suggests that the per container cost of importing is ~18% greater for Puerto Rico when compared to the Dominician Republic (which wouldn't be impacted by the act). Of course when compared to the mainland, it's ~5% greater. I wanted to link the world bank source as well, but can only provide 2 links. The World Bank data indicator if you want to find it is "Cost to import(US$ per container)".

Actual consumer prices in Puerto Rico aren't significantly higher than prices on the mainland, except for a few choice things like Milk (which is probably more a result of having to ship milk by container ship than from a nearby farm).

https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=United+States&country2=Puerto+Rico&city1=Miami%2C+FL&city2=San+Juan

Far as who is still 'defending it', the ones that stand to lose if it's repealed (ship building unionists, elected officials from states whose major employers include ship builders, and the military if this organization's leaflet is to be believed). http://www.mebaunion.org/assets/1/6/Support_The_Jones_Act.pdf

2
  • 8
    "It has no impact on a Chinese freighter delivering a boat load of goods to Puerto Rico, or Hawaii for that matter, at least when the origination point is not a US port." This is not true. If a Chinese freighter does this, it can't continue to another US port. So a Chinese freighter can't take loads to both Hawaii and California on the same trip. That is certainly an impact, particularly as Hawaii usually doesn't require an entire freighter load of cargo.
    – Brythan
    Sep 28, 2017 at 19:28
  • 1
    @Brythan - I've seen arguments that nothing stops a freighter from making drops at multiple ports, but would be unable to drop in Hawaii, pick up more freight there, and then proceed to another port. Which would explain why it affects the cost of shipping to Hawaii (making the trip from Hawaii to the US with half your ship empty is probably not cost effective). I tried very hard to find a clear cut answer to whether ships are able to do this, but was only able to find hawaiifreepress.com/ArticlesMain/tabid/56/ID/10736/… . Sep 28, 2017 at 20:11

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .