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What Is The Jones Act? Definition And Pros & Cons

Last updated 03/20/2024 by

SuperMoney Team

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Summary:
The Jones Act is a federal law that regulates maritime commerce in the United States. It requires that all goods transported by water between U.S. ports be carried on U.S.-flagged ships that are built, owned, and crewed by Americans.

What is the jones act?

The Jones Act, also known as the Merchant Marine Act of 1920, is a federal law that regulates maritime commerce in the United States. The law requires that all goods transported by water between U.S. ports be carried on U.S.-flagged ships that are built, owned, and crewed by Americans. The act also requires that at least 75% of a ship’s crew be U.S. citizens.
The Jones Act is intended to promote the growth of the U.S. shipping industry and protect national security by ensuring that the country has a reliable supply of American-built and American-manned ships. It is also designed to protect American workers in the shipping industry by requiring that ships be built and crewed by Americans.

Understanding the jones act

The Jones Act was passed in 1920 in response to concerns about the loss of American shipping during World War I. The law was intended to support the growth of the U.S. merchant marine by requiring that all goods transported by water between U.S. ports be carried on American ships.
The act has been controversial over the years, with some critics arguing that it has resulted in higher shipping costs and hindered competition in the industry. Proponents of the Jones Act, however, argue that it is necessary to protect national security and promote the growth of the U.S. shipping industry.

Costs of the jones act

The Jones Act has been criticized for its high costs, which can make it more expensive to transport goods between U.S. ports than between U.S. and foreign ports. Some estimates suggest that the law results in shipping costs that are two to three times higher than they would be without it.
One reason for the high costs is that the law requires that ships used for transporting goods between U.S. ports be built in the United States, which can be more expensive than building them in other countries. The law also requires that ships be crewed by Americans, which can increase labor costs.

Pros and cons of the jones act

Proponents of the Jones Act argue that it is necessary to protect national security and promote the growth of the U.S. shipping industry. They argue that the law helps ensure that the United States has a reliable supply of American-built and American-manned ships, which is essential for national defense.
Critics of the Jones Act, however, argue that it results in higher shipping costs and hinders competition in the industry. They also argue that the law can lead to shortages of shipping capacity during times of high demand.

FAQs about the jones act

Does the jones act only apply to maritime workers?

Yes, the Jones Act is a federal law that applies to maritime workers who are U.S. citizens or permanent residents, including seamen, longshoremen, and harbor workers.

How does the jones act impact the shipping industry?

The Jones Act requires all goods shipped between U.S. ports to be carried on U.S.-built, U.S.-flagged, and U.S.-crewed vessels. This has led to higher costs for domestic shipping, making imported goods cheaper in some cases.

What are some arguments in favor of the jones act?

Supporters of the Jones Act argue that it promotes national security by ensuring that the U.S. has a strong domestic shipping industry. They also point out that the law helps to protect the jobs of U.S. maritime workers.

What are some arguments against the jones act?

Opponents of the Jones Act argue that it increases shipping costs, which can ultimately lead to higher prices for consumers. They also argue that it restricts competition and innovation in the domestic shipping industry.

Is the jones act unique to the united states?

No, other countries have similar laws that require goods transported between domestic ports to be carried on ships that are built, flagged, and crewed by that country.

Can the jones act be repealed?

Yes, the Jones Act can be repealed by an act of Congress, but there is no current effort to do so.

Key takeaways

  • The Jones Act, also known as the Merchant Marine Act of 1920, is a US federal law that requires all goods transported by water between US ports to be carried on US-built, US-owned, and US-flagged ships operated by US citizens or permanent residents.
  • The Jones Act was originally designed to protect American jobs and industries, but it has also been criticized for increasing costs and reducing competition.
  • Supporters of the Jones Act argue that it is necessary for national security and maintaining a strong domestic shipping industry.
  • The Jones Act has both benefits and drawbacks, and policymakers and citizens must weigh the costs and benefits to determine the best course of action for the country’s shipping and trade policies.

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