President Trump on Wednesday declared a 60-day waiver of one of the oldest maritime laws in the United States. The move immediately drew both praise from free-market advocates and questions about why the century-old regulation exists at all.
The waiver temporarily suspends the Jones Act, a provision of the Merchant Marine Act of 1920, to allow foreign-flagged vessels to transport oil, natural gas, fertilizer, and coal between U.S. ports — a practice normally restricted to American-built, American-owned, and American-crewed ships. White House press secretary Karoline Leavitt said the action would "mitigate the short-term disruptions to the oil market" and "allow vital resources like oil, natural gas, fertilizer, and coal to flow freely to US ports."
According to the New York Post, the announcement comes as global energy markets face significant pressure. Joint U.S.-Israeli air strikes on Iran on Feb. 28 have contributed to supply concerns, with reports that Tehran blocked access to the Strait of Hormuz, reportedly set several oil tankers ablaze, and threatened to attack vessels transiting the critical waterway. The Strait of Hormuz transports 20% of the world's oil supply.
As of Wednesday, Brent crude oil had climbed to $108 a barrel, while West Texas Intermediate sat at $98. National average gasoline prices stood at $3.84 a gallon, according to AAA, with diesel prices topping $5 a gallon.
The White House had signaled last week that it was exploring a temporary suspension of the law. Other actions taken by the Trump administration include a temporary lift on Russian energy sanctions and a pledge by Trump to release 172 million barrels from the U.S. Strategic Petroleum Reserve. Additionally, the International Energy Agency last week agreed to release a record 400 million barrels of oil onto the global market. Together, these measures represent one of the most coordinated efforts to push energy prices lower in recent memory.
The Jones Act was signed into law by then-President Woodrow Wilson as part of the Merchant Marine Act of 1920. At its core, the law requires that goods shipped between U.S. ports be carried on vessels that are American-built, American-owned, and crewed by U.S. citizens or permanent residents.
Supporters have long argued that the law protects domestic shipbuilding jobs, national security, and the U.S. maritime industry. Critics — particularly those with a free-market orientation — counter that the law artificially inflates shipping costs, restricts supply chains, and ultimately raises prices for American consumers.
President Trump himself called the law "restrictive." Jones Act waivers must be approved by the Secretary of Defense on national security grounds, according to the U.S. Department of Transportation. Previous waivers were granted after Hurricane Katrina in 2005, Hurricane Maria in 2017, and the cyberattack that shut down an energy pipeline in 2021.
The issue has sparked a broader debate among fiscal conservatives and libertarians about whether a temporary waiver goes far enough. Jo Jorgensen, the libertarian nominee for president during the 2020 election, called for the Trump administration to go beyond a suspension. "If suspending the Jones Act lowers oil prices, that tells you everything you need to know about the damage it causes when it is in force," Jorgensen wrote on X.
"Don't just suspend it. End it," she added. Her argument reflects a growing sentiment among market-oriented thinkers: if waiving a regulation proves it was raising costs, the regulation itself deserves permanent scrutiny.
Peter Schiff, chief global strategist of Euro Pacific Capital, struck a similar tone. He wrote on X that "since this is an admission that the Jones Act raises gas prices, why not repeal it entirely?" Schiff's post also noted the waiver would allow foreign tankers to supply refiners on the East Coast with fuel from the Gulf Coast and other U.S. locations.
According to the Center for American Progress, the waiver could decrease gas prices on the East Coast by roughly three cents per gallon. That is hardly a transformative figure for drivers already paying nearly $4 a gallon — or more than $5 for diesel — but it signals a willingness to remove regulatory friction from the energy supply chain.
The larger question is one Milton Friedman would have relished: if a law must be waived every time there is a crisis, what is it accomplishing the rest of the time? The Jones Act has survived for over a century, weathering criticism from economists across the political spectrum who argue it is a textbook case of protectionism raising costs for consumers while benefiting a narrow set of domestic interests.
For investors and consumers watching energy markets, the takeaway is straightforward. The combined release of hundreds of millions of barrels from strategic reserves, the temporary lifting of shipping restrictions, and diplomatic maneuvering on sanctions all point to an administration aggressively trying to push energy costs lower. Whether these short-term measures translate into lasting relief — or whether the Jones Act ultimately faces permanent reform — remains to be seen.