According to recent reports, White House Press Secretary Karoline Leavitt has stated that “[i]n the interest of national defense, the White House is considering waiving the Jones Act for a limited period of time to ensure vital energy products and agricultural necessities are flowing freely to U.S. ports.”
It is, therefore, worth revisiting how the passage of the James M. Inhofe National Defense Authorization Act (NDAA) for Fiscal Year 2023 significantly circumscribed the Executive Branch’s discretionary authority to waive the Jones Act under 46 U.S.C. § 501.
By way of background, there are two types of waivers possible under the statute. The first, under Section 501(a), are those granted automatically upon request by the Secretary of Defense to the extent necessary to address an immediate adverse effect on military operations. Given that the current volatility in the Gulf is a commercial supply issue, it is unlikely to meet this strict military threshold.
That leaves the second type: a discretionary waiver under Section 501(b). However, the 2023 NDAA amendments fundamentally altered the mechanics of this authority.
First, the determination of “national defense interest” must now be made personally by the President, rather than delegated to the Secretary of Homeland Security. Second, it requires a formal confirmation from the Maritime Administration (MARAD) that no coastwise-qualified, U.S. flagged vessels are available to meet the specific requirement.
Furthermore, these discretionary waivers are now strictly limited to 10 days in duration. While they may be extended, the aggregate duration of all waivers for a single set of events cannot exceed 45 days. Finally, waivers can only apply prospectively. This means they cannot be cures for vessels already laden with cargo, effectively barring foreign tankers currently in transit from suddenly entering the domestic trade.
These statutory guardrails will sharply curtail the practical impact of any waivers issued by the administration. While proponents frequently cite relief for the American consumer, maritime transport costs represent a marginal fraction of the retail price of gasoline. According to data from the Congressional Research Service, even a total repeal of the Jones Act would result in a statistically insignificant change at the pump, as retail prices are dictated by global crude benchmarks and refining capacity.
Ultimately, the primary effect of such a waiver would be a windfall of labor arbitrage for domestic oil transporters. By utilizing foreign-flagged vessels, these entities would circumvent the requirement to employ American merchant mariners, thereby avoiding U.S. labor standards, safety regulations, and collective bargaining protections.
