The US domestic maritime industry is reacting to rumors that US president Donald Trump's administration is considering extending the suspension of domestic shipping requirements under the Jones Act for a second time before its 90-day extension ends on 16 August.
The Trump administration issued the Jones Act waiver, which allowed foreign flagged and owned vessels to carry US-to-US shipments in place of US-flagged, US-owned and US-crewed vessels, on 17 March on national security grounds and later extended it by 90 days. But some of the voyages conducted under the waiver have been criticized by the domestic maritime industry as not serving any national security purpose. Republican lawmakers have since urged president Trump to restore the Jones Act, calling the waiver "a loophole exploited by adversarial countries to erode America's maritime dominance".
Jones Act-compliant shippers have borne the brunt of the encroachment of foreign vessels into the typically US-only space, with June shipments of refined oil products shipped domestically via foreign-flagged vessels totaling 45, more than half of the 81 shipments carried by Jones Act-compliant vessels, Vortexa data show.
"The Offshore Marine Service Association (OMSA) is responding to reports that the Trump administration is considering extending the current Jones Act waiver, warning that another extension would only further undermine the domestic maritime industry while continuing to provide no meaningful benefit to American consumers," OMSA said in a 17 July press release.
OMSA also emphasized that the Jones Act waivers are intended for national defense and security, not as a recurring commercial policy tool.
Criticism that the waiver has unduly affected the same US maritime industry Trump has attempted to galvanize in his second term may be met with geographical restrictions in the potential second waiver extension, however, according to at least one Jones Act market participant.
"A geographically boxed-in waiver could take some heat off the administration from the domestic industry compared to a blanket waiver, since it signals that they're trying to preserve the Jones Act fleet's core trading lanes rather than continue to suffocate the US flag owners," a broker familiar with the matter told Argus.
A White House official told Argus on 17 July that no decision on a third waiver extension has been made at this time and that further announcements will be made directly by the president or the administration.
"President Trump's decisive action to waive the Jones Act has helped prevent supply chain shortages across the country," the official added.
