US President Trump Waives Century-Old Shipping Law Amid Rising Fuel Costs

US President Donald Trump has issued a 60-day waiver to lift the Jones Act, a maritime shipping law that requires goods shipped between US ports to be carried on vessels that are US-built, US-flagged, and mostly US-owned. The waiver allows foreign-flagged vessels to transport cargo to US ports.

The White House stated that the action will allow vital resources like oil, natural gas, fertilizer, and coal to flow freely to US ports for 60 days. The administration claims this move could reduce shipping costs and speed up deliveries.

However, maritime industry unions have questioned the effectiveness of the waiver in lowering fuel costs. They argue that the primary driver of gasoline prices is the cost of crude oil, not domestic shipping costs. Instead, they suggest that a Jones Act waiver would create opportunities for foreign-flag operators that avoid paying US taxes, rely on low-wage labor, and operate under regulatory regimes that circumvent international labor and vessel safety standards.

The Trump administration defends the waiver as a temporary measure aimed at supporting the release of 172 million barrels of oil from the US Strategic Petroleum Reserve. Experts note that this move will have limited impact on global price fluctuations.

The waiver comes amid rising fuel costs due to the ongoing conflict between the US, Israel, and Iran. The Strait of Hormuz, a key waterway connecting the Gulf to the Indian Ocean, has been blocked by Iran since February 28, resulting in a significant decrease in tankers passing through the passage. This blockage has caused global oil supply to be strained, leading to increased fuel prices worldwide.

The average price for a gallon of petrol in the US is $3.84, up from $2.92 last month. Experts predict that changes at the petrol pump due to the Jones Act waiver will be negligible.

Source: Al Jazeera