Debating Jones Act defenders is like playing whack-a-mole
by Melissa Newsham, Grassroot Institute, April 15, 2025
The negative consequences of the protectionist Jones Act are well established. Yet, debating defenders of this old federal maritime law often feels like a game of whack-a-mole: No matter how many times the law’s supposed benefits are debunked, the same old arguments pop up again and again.
This frustrating situation is especially top of mind in Hawaii, since the isolated state is heavily reliant on waterborne transportation and so is directly affected by the law, which requires ships transporting goods between U.S. ports to be built, flagged, and mostly owned and crewed by Americans.
A good example of the “whack-a-mole” phenomenon is a recent pro-Jones Act commentary in the Honolulu Star-Advertiser, Hawaii’s largest daily newspaper. In just 490 words, the author rehashed many of the myths found far too often in pro-Jones Act propaganda, as if nary a word has ever been said proving them to be false.
In the order they were presented:
>> The Jones Act does not impact fuel costs in Hawaii.
The pro-Jones Act article claimed that “the Jones Act doesn’t impact the cost of fuel in Hawaii because our island refinery shops for the best prices on the global market.”
This argument ignored a key factor: Refiners must consider not just the price of oil but also the cost and feasibility of transporting it. In addition, the lack of Jones Act-compliant tankers means U.S. refineries cannot always source domestic oil — even when it might be cheaper to do so.
A 2020 study commissioned by the Grassroot Institute of Hawaii, “Quantifying the cost of the Jones Act to Hawaii,” found that the Jones Act costs Hawaii consumers between $19.1 million and $55.2 million per year on gasoline and adds 14 cents daily to the average Hawaii family’s energy bills.
And those are just the direct costs consumers pay. Fuel costs ripple across every industry, driving up prices in virtually every sector.
>> Jones Act critics prefer foreign goods and services over domestic ones.
The pro-Jones Act essay continued: “Crude oil is delivered by foreign-owned ships, operated by foreign corporations, employing foreign crews, that do not pay taxes to the USA. This is precisely the ‘model’ that some insist would provide for a much cheaper cost of living here in Hawaii.”
This statement, however, misrepresented what critics of the Jones Act have been saying. The issue isn’t about preferring foreign goods or services — it’s about ensuring American consumers can access the most affordable options.
In reality, the Jones Act itself forces greater reliance on foreign imports. As the Grassroot Institute has documented, Jones Act restrictions inflate the cost of U.S.-built ships, increase operating expenses and limit the number of available vessels. As a result, Hawaii’s refiners often have no choice but to purchase foreign oil rather than pay the high cost of securing scarce Jones Act-compliant ships.
In other words, the Jones Act directly contributes to the very reliance on foreign shipping that its defenders claim to oppose.
>> Research has proven the Jones Act has no impact on Hawaii’s cost of living.
The pro-Jones Act article cited a 2020 study commissioned by the American Maritime Partnership — a major Jones Act lobbying group — that concluded the law has no effect on Hawaii’s cost of living.
However, the Grassroot Institute debunked that study immediately after it was published. In short, the AMP report relied on flawed methodology, including a superficial comparison of online grocery prices at Walmart, Target and Costco stores in Hawaii and Los Angeles.
More comprehensive and rigorous studies have found that the Jones Act does indeed impact Hawaii’s cost of living, including the Grassroot study, which found that the law costs the average local family approximately $1,800 annually.
>> Critics of the Jones Act are motivated by financial self interest.
The pro-Jones Act article peddled the claim that European shipping interests have been influencing the Cato Institute’s advocacy for Jones Act reform — a claim that the institute has firmly denied. Yet, while questioning the motives of Jones Act critics, Jones Act defenders conveniently ignore their own financial incentives.
The biggest financial beneficiaries of the protectionist law are America’s domestic shipping and shipbuilding companies and maritime unions that have a vested interest in maintaining their industry stronghold. By restricting competition, the law shields existing players from potential market entrants.
Jones Act carrier Matson, which along with Pasha has a virtual monopoly on the Hawaii market itself, admitted this in its latest financial report:
“If the Jones Act were to be repealed, substantially amended or waived and, as a consequence, competitors were to enter the Hawaii or Alaska markets with lower operating costs by utilizing their ability to acquire and operate foreign-flagged and foreign-built vessels and/or being exempt from other U.S. regulations, the Company’s business would be adversely affected.”
>> Reforming the Jones Act would mean giving away “economic security” to foreign countries.
The pro-Jones Act article argued: “Why would we choose to give away our economic security to foreign countries, such as China, and rely on them entirely to deliver our food, medicine and everything else we need to survive here in the middle of the Pacific Ocean?”
This assumes that the U.S. is economically independent under the Jones Act, but as previously explained, this is not the case. The outdated law has meant Hawaii has to import foreign oil on foreign vessels because there simply are not enough Jones Act-compliant vessels.
Even when Jones Act-compliant ships are available, they are far more expensive than their foreign counterparts. Labor, insurance, maintenance and regulatory costs drive up operating costs such that a U.S.-flag vessel costs $6 million more annually to operate, on average, than foreign-flagged vessels.
Faced with these economic realities, Hawaii must turn to foreign countries for oil and other goods. We don’t need to reform the Jones Act to “give away” economic security — the Jones Act already does that.
>> Calling for Jones Act reform is equivalent to not sufficiently appreciating America’s maritime industry.
The pro-Jones Act article concluded: “Born and raised here on Oahu, it saddens me that Hawaii residents do not have a greater appreciation for our local maritime industry and the value of the Jones Act.”
This statement, of course, conflates the Jones Act with the maritime industry in general, as if they were one and the same. But they are not. Waterborne transportation operations would exist in America even if there were no Jones Act, which serves only to restrict the industry, so it is possible to appreciate the local maritime industry but not the Jones Act.
In fact, it’s possible the industry would be larger and more prosperous if there were no Jones Act at all, or at least reformed to allow greater market flexibility and cost savings. As discussed in the December 2024 Grassroot report “U.S. maritime jobs disappearing despite protectionist Jones Act,” there are many ways the Jones Act could be reformed to help revive America’s flagging maritime sector.
For instance, revising the U.S.-build requirement could allow American companies to purchase high-quality, reasonably priced ships from allied nations such as Japan and South Korea. This would put more vessels into service, create more maritime jobs and reduce shipping costs.
But the mounting evidence against the Jones Act and options for practical reforms are virtually ignored by its defenders, who adamantly refuse to support even the most limited exemptions to the law, such as using international ships to transport fuel from the Oahu’s Red Hill Bulk Fuel Storage Facility in 2023.
This raises the question of whether the Jones Act is truly about economic and national security or merely about preserving the status quo for entrenched shipping companies and related special interests.
Undoubtedly, many Jones Act defenders are sincere in their concerns. But good intentions do not change the reality of the law’s effects, nor does constantly repeating the same myths make them true.
The fact remains that the Jones Act is an unnecessary burden on consumers — in Hawaii and throughout the nation. It drives up costs, weakens U.S. maritime competitiveness and failed to preserve the industry it was meant to protect.
Policy decisions have real consequences. If we are going to debate them, we must do so precisely and accurately, rather than relying on claims that have already been debunked.