Trump’s proposed Jones Act waiver not enough on its own for lower gas prices

President Donald Trump has few levers to curb skyrocketing gas prices as the war in Iran approaches its third week. He is now considering abandoning an obscure trade policy that will likely have little effect in mitigating these price increases, at least on its own.

The White House said Thursday it may relax shipping rules under the Jones Act, a century-old maritime law requiring that goods shipped between U.S. ports be transported on U.S.-owned ships with an American crew.

“In the interest of national defense, the White House is considering waiving the Jones Act for a limited period to ensure that vital energy and essential agricultural products flow freely to U.S. ports,” White House Press Secretary Karoline Leavitt said in a statement.

Bloomberg reported Thursday that the Jones Act relaxation would apply to commercial vessels carrying oil, gasoline, diesel, natural gas and fertilizer. All have seen a price spike since the United States and Israel first attacked Iran last month. A waiver would allow foreign-flagged ships to deliver goods between U.S. ports.

The Trump administration is exploring various options to provide relief at the pump to Americans already exhausted by rising prices for groceries, utilities and more. Putting the Jones Act on the table is the latest sign that the White House feels the political will to address rising gas prices and contain the financial fallout from the war.

Gas prices reached a national average of $3.63 on Friday, according to AAA. A month ago, it was $2.94 a gallon.

Energy analysts, however, believe that a waiver of the Jones Act alone will not produce the desired effect, namely a sharp drop in gas prices.

“A waiver will not result in a dramatic drop in fuel costs,” Colin Grabow, a trade policy expert at the libertarian-leaning Cato Institute, said in a blog post Thursday. “Transportation is just one of many factors that determine prices at the pump.”

“Think what you want about the Jones Act…the impact on retail gasoline prices will be less than 2 cents a gallon. Negligible,” Alex Jacquez, policy and advocacy chief for the left-leaning Groundwork Collaborative, said in a social media post.

This is not the only major measure aimed at easing gas prices this week. The Energy Department announced Wednesday evening that it plans to release 172 million barrels over four months from the Strategic Petroleum Reserve, the United States’ emergency stockpile. It was part of a coordinated action with dozens of other countries also tapping their emergency oil reserves in a bid to limit rising oil prices.

The war in Iran has shaken energy markets and sent oil prices soaring, which now hover at $100 a barrel. Oil trading has been up and down this week, fueled by uncertainty over the duration of the conflict and the threat of escalation.

In recent days, Iran has retaliated by launching military strikes in the Strait of Hormuz, a key waterway that accounts for a fifth of global oil transportation. Commercial shipping companies have avoided the waterway, fearing loss of life and the possible destruction of their ships.

The energy sector is alarmed by hostilities that appear to have no end in sight. Trump has given mixed signals about whether the war will continue unabated or whether it is close to achieving its goals. The International Energy Agency said this week that the conflict had caused “the largest supply disruption in the history of the global oil market.”

The Jones Act has already been invoked during natural disasters.

The Jones Act was not on the White House agenda during the second Trump administration. But it has already sparked political discussions.

The law has long drawn criticism among some trade observers, who say the Jones Act is a restrictive policy that inflates the cost of shipping goods and shipbuilding in the United States.

“This limits transportation options and increases costs,” Grabow said in the same blog post. “A law presented as essential to national security suddenly becomes optional when pressure increases.”

The Jones Act received new attention after Hurricane Maria hit Puerto Rico with its devastating effects in 2017, and then again with Hurricane Fiona in 2022. Critics argued that the law imposed higher prices on the island’s economy since it forced commercial ships to dock first at a U.S. mainland port to avoid punitive fees.

Until now, the Jones Act has been considered virtually untouchable. Trump is now considering other once-unthinkable policy options, such as intervening in oil futures markets, Reuters reported.