Could “Tariff Man” Trump support Jones Act reform?

by Michael Hansen, Hawaii Shippers Council, June 5, 2020

The Washington Times published on June 3, 2020, the op-ed “How the maritime industry is sunk by prohibition,” written by Casey b Mulligan, professor of economics at the University of Chicago and formerly chief economist of the White House Council of Economic Advisers from 2018 to 2019.

As the former chief economist of the Council of Economic Advisors, Mulligan would have had direct access to President Trump and many of the President’s cabinet officers and White House staff, which lends credibility to his opinions regarding those persons.

Mulligan says that despite Trump’s reputation as a strong supporter of protectionist tariffs, the President sees the Jones Act as a “harmful regulation” and is particularly disappointed by the lack of competitiveness of U.S. shipyards, which are protected by the coastwise domestic build requirement.

Key excerpts from the Washington Times:

Although President Trump is known as “A Tariff Man,” all of the presidents in our lifetime have been far more draconian when it comes to “protecting” the U.S. maritime industry with the 100-year-old Jones Act. The result has been fatalities, the decimation of an industry, heavy burdens on American consumers and businesses and, most recently, a genuine Russia scandal.

Unintended consequences abound as customers try to avoid some of the extra expense.

One tactic is to rely on a dangerous tug-barge operation because the barge requires no crew

A sizable amount of the cargo that, without the Jones Act, would be shipped on coastal waters ends up on trucks congesting our highways and polluting our atmosphere, especially near large cities where many people live and breathe.

The good news is that not everyone is onboard with the Jones Act, namely President Trump. He sees it for what it really is; a harmful regulation like the ones he has succeeded in eliminating from health insurance, telecommunications, farming and many other industries.

Moreover, he hates that America has fallen so far behind ship builders in China, Korea and Japan. He and others on his staff find it ridiculous that nowhere on Earth is there a single LNG carrier that fits the Jones Act criteria.

The bad news is that a web of powerful special interests is committed to keeping the Jones Act afloat.

In 2008, presidential candidate Barack Obama knew that he must genuflect to the Seafarers International Union, writing that “your members can continue to count on me to support the Jones Act … and the continued exclusion of maritime services in international trade agreements.”

The web is well established in Congress, too.