The Jones Act has faced criticism from those who argue that the protectionist statute increases costs to the shipping industry.
On January 25, 2021, President Joe Biden signed the Executive Order on Ensuring the Future Is Made in All of America by All of America’s Workers, reaffirming his administration’s support for, among other things, the Jones Act.
The Jones Act requires, in general terms, that the transportation of merchandise between “points” in the United States be carried out by U.S.-owned, -built and -flagged vessels. Violating the Jones Act can carry severe penalties ranging from governmental seizure of transported merchandise to fines equal to the value of the merchandise or the cost of transportation. The Jones Act has faced criticism from those who argue that the protectionist statute increases costs to the shipping industry, precludes foreign ships from assisting in cases of national emergency and creates unnecessary obstacles for industry stakeholders, particularly where U.S.-flagged vessels do not have the same capabilities as their foreign counterparts.
But the executive order makes it clear that the 100-year-old law will remain intact for the foreseeable future. As set forth in a January 25 White House press release, the executive order:
Reiterates the President’s strong support for the Jones Act. The President will continue to be a strong advocate for the Jones Act and its mandate that only U.S.-flag vessels carry cargo between U.S. ports, which supports American production and America’s workers. With the signing of the 2021 National Defense Authorization Act, the Jones Act has also been affirmed as an opportunity to invest in America’s workers as we build offshore renewable energy, in line with the President’s goals to build our clean energy future here in America.
Among other actions, the executive order creates a new position—director of the Made in America Office at the Office of Management and Budget—to manage “buy American” compliance; updates and centralizes the Made in America waiver process; and requires a biannual report on and review of every agency’s compliance with Made in America laws, including the Jones Act.
The president’s nomination of former South Bend, Indiana, Mayor Pete Buttigieg as Transportation Secretary, which was confirmed on February 2, further underscores the administration’s support for the Jones Act. In January, Buttigieg expressed his support for the Jones Act, explaining: “[The Jones Act] is so important to a maritime industry that creates hundreds of thousands of jobs, as well as a shipbuilding industry here in the U.S.”
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