Last month, the Trump administration issued a 60-day waiver of the Jones Act in order to make it easier to move petroleum and fertilizer products between U.S. ports. Availability of foreign tanker tonnage in a tight market was an initial limitation, and uptake was low at first, but in recent weeks about 40 foreign-flagged vessels have moved products in U.S. coastwise trade. Now, the administration has notified Congress that it plans to extend the waiver for another 90 days. It is by far the longest and broadest application of the Jones Act's waiver provision since the Second World War - and has sparked outrage across the industry.

"As long as the Iranians are a threat and raising fuel prices, the president would like to keep the waiver in place for as long as is necessary," an advisor to the president told Axios on Thursday.

From the administration's perspective, a waiver reduces friction in the petroleum market at a time of elevated prices. California has received multiple shipments of gasoline on foreign tonnage, and Alaska has reportedly received about half of its monthly jet fuel allotment on foreign tankers - without reaching for imported supplies. In total, the waiver has been used to move about nine million barrels of petroleum so far, according to the White House.

Initial use of the waiver centered on moving refined products out of the Gulf Coast, but that may be changing. According to Kpler, Phillips 66 chartered a foreign-flagged crude tanker - the Malta-flagged HTM Warrior - to lift U.S. oil from Beaumont and deliver it to Monroe Energy's Trainer oil refinery in Pennsylvania. It appears to be the first such instance since the waiver took effect. Coastwise crude oil moves of this type are uncommon on Jones Act tonnage along the East Coast, as the sector is largely geared towards the movement of refined products.

The prospect of a persistent Jones Act waiver is of great concern to Jones Act shipowners, who have spent billions to purchase U.S.-built tonnage and hire U.S.-citizen mariners. The act is essential to the industry's survival, as foreign operators can use lower-cost foreign labor to minimize shipbuilding and crewing costs, giving them ample room to undercut U.S. operators on price. This is of deep concern to Jones Act shipowners and shipbuilders, who have expressed outrage at an apparent departure from the administration's earlier emphasis on "America First" shipping policies.

“This extension of an already historically long and ineffective Jones Act waiver is not only an affront to hundreds of thousands of hardworking Americans who put this country first every single day, it sabotages President Trump’s agenda to restore American maritime dominance,” said Jennifer Carpenter, President of the American Maritime Partnership. “Waiving the Jones Act exports American jobs to foreign carriers, allows them to skirt U.S. laws, and exposes the nation to national security threats by opening our maritime borders.”

"The Jones Act is the foundation of the American maritime industry, ensuring that U.S. domestic cargo movement supports American workers, vessels, shipyards, and the industrial base our Navy relies on. Extending this waiver undermines that foundation by signaling that American ships can be sidelined, driving away the long-term investment, possibly permanently. The initial waiver has not reduced gasoline prices, rather prices have increased in every U.S. market while benefiting NATO countries that have refused to support U.S. military operations," said Aaron Smith, president and CEO of the Offshore Marine Services Association. "To put it simply, a waiver extension sells out our American maritime industry and the foundation of our Navy to benefit oil traders and foreign shippers. Now is the time we should strengthen U.S. maritime capacity, not weaken it."

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"Waivers have unequivocally proven they do nothing to reduce gas prices for Americans. What waivers actually do is have a chilling effect on investments in commercial shipbuilding markets and create wide open ports and coastlines for any foreign ship or crew to call and gouge hardworking Americans while foreign energy companies and shippers get rich. These actions clearly demonstrate that this policy is ‘America last,'" said Matt Paxton, President of the Shipbuilders Council of America.

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