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Every product shipped between American ports must travel on a ship that was built in America, owned by Americans, and crewed by Americans. Oil from Houston to New York. Grain from Duluth to Chicago. Fuel to Puerto Rico and Hawaii. No exceptions. That’s the Jones Act. It has been the law since 1920.
It was supposed to protect American shipbuilding. Instead, the American commercial fleet has collapsed. From 2,926 large U.S.-flagged ships in 1960 to just 188 in 2025. China builds half the world’s commercial tonnage. The U.S. builds less than 1%. And American-built ships cost four to five times more than comparable vessels from Asian yards.
In March 2026, the government waived the law — the broadest waiver in its 106-year history. That waiver expires August 16. What happens next will reshape American maritime policy for a generation.
The Merchant Marine Act of 1920 — named for Senator Wesley Jones of Washington — has three requirements. Ships carrying cargo between U.S. ports must be built in the United States, owned by U.S. citizens, and crewed by at least 75% American citizens or permanent residents.
The law covers all domestic waterborne commerce: coastwise shipping, Great Lakes trade, inland waterways, and routes to Hawaii, Alaska, Puerto Rico, and Guam. It makes the U.S. the most restrictive maritime market in the OECD. A 1999 International Trade Commission study found the restrictions are equivalent to a 64% tariff on domestic coastal shipping.
Supporters say it’s a national security cornerstone. The Jones Act fleet supports roughly 650,000 American jobs and contributes $150 billion to the economy annually. Without domestic ships and trained mariners, the argument goes, the U.S. would depend on foreign vessels during a crisis.
Critics point to the paradox. The law was designed to protect American shipbuilding, but the industry has atrophied under its protection. Shielded from global competition, U.S. yards faced no pressure to innovate or cut costs. Fewer than 30 container ships in the world meet Jones Act requirements. Not one LNG tanker qualifies. The fleet’s average age far exceeds the global norm.
On March 17, DHS issued the broadest Jones Act waiver in history at the Department of Defense’s request. It opened U.S. domestic waterways to foreign-flagged and foreign-built vessels carrying energy and agricultural commodities. The waiver was extended through August 16.
The Atlantic Council argues the waiver exposed the law’s core flaw: the U.S.-build requirement should be eliminated while keeping the ownership and crew mandates. That would let American carriers buy modern ships on the global market while still employing American workers. Whether Congress acts or lets the waiver quietly expire will define maritime policy for decades.
The Jones Act is a rare policy where the “American Made” question cuts both ways. Keep it, and you protect 650,000 American maritime jobs. But you also accept higher shipping prices, a shrinking fleet, and an industry that can’t compete globally. Reform it, and you risk those jobs — but you might actually grow the fleet by letting carriers buy affordable modern ships.
For investors, watch Huntington Ingalls (NYSE: HII) and General Dynamics (NYSE: GD) — the two largest U.S. shipbuilders. Both focus on naval, not commercial, vessels. If the build requirement is eliminated, commercial shipbuilding stays overseas. If it’s strengthened with subsidies, U.S. yards could see new orders for the first time in decades.
This is the hardest policy question in American manufacturing. Protecting domestic production is what this newsletter is about. But the Jones Act shows what happens when protection lasts a century without accountability. The fleet shrank. The yards stagnated. And when a crisis came in March, the government had to waive its own law to keep energy moving. That’s a lesson worth sitting with.