The 2026 Jones Act waiver has not been shown to meet its legal test, opened America’s coastwise trade to Chinese- and Russian-linked ships, and produced no demonstrated national fuel-price relief. It should expire on August 16.
KEY FINDINGS:
The administration has not publicly made its legal case. Section 501(a) allows a waiver only to address an immediate adverse effect on military operations, and requires a written explanation to Congress, including confirmation that insufficient qualified vessels are available. More than four months in, that explanation and confirmation have not been made public, and the public voyage reports describe commercial petroleum and energy cargoes whose connection to an immediate military operation has not been explained.
The waiver opened America’s coastline to its chief maritime rival. Through July 2, nearly a third of the 145 waiver movements carried a China linkage: 30.3% involved a vessel with a China or Hong Kong nexus through its owner, builder, or technical manager, and 23.4% were built in China. One is operated by a COSCO subsidiary whose parent group appears on the Pentagon’s list of Chinese military companies.
Coastwise freight was not the principal driver of fuel prices. The Jones Act governs business-to-business freight between U.S. ports, a few cents a gallon. Foreign competition trimmed that on some routes and raised it on others, and the waiver produced no demonstrated national fuel-price relief. The larger pressure came from the global refined-product market, where the 3-2-1 crack spread approached $70 a barrel.
Elevated exports undercut the case for a generalized shortage. Gross U.S. crude oil and petroleum-product exports averaged about 12.3 million barrels a day across the waiver’s 18 reporting weeks, roughly 17% above 2025, totaling around 1.5 billion barrels. That does not rule out a regional constraint, but it undercuts any claim of generalized national scarcity.
Opposition spans both parties.52 House Republicans urged the administration to let the waiver expire on August 16, and Democratic transportation leaders separately called it a direct threat to the maritime industry and demanded the voyage-by-voyage military justification the law requires.
Introduction
In late June, the Chinese-flagged tanker Jin Zhou Wan loaded asphalt in Paulsboro, New Jersey, and carried it to Baltimore. Weeks earlier it had run bitumen from Harvey, Louisiana, to New Haven. Both voyages move cargo between U.S. ports, the work the law reserves for American-built, American-owned, American-flagged, and American-crewed vessels. They were legal only because the Trump administration has suspended the Jones Act. The vessel is operated by COSCO Shipping Asphalt (Hainan), part of China COSCO Shipping Corporation, whose parent group appears on the Department of Defense’s Section 1260H list of Chinese military companies.
The Jones Act waiver issued during the Strait of Hormuz crisis has become a policy that struggles to justify itself. It was cast as an emergency measure for national defense and lower fuel prices. More than four months later, the administration has not publicly shown the military necessity the law demands. The waiver has shifted a substantial share of coastwise movements to foreign and adversary-linked vessels, and it produced no demonstrated reduction in the fuel prices that global markets and record refining margins were driving. The waiver should expire on August 16.
The Waiver’s Legal Case Has Not Been Made
The administration has not publicly demonstrated that the waiver met the standard that justifies one. Section 501(a) permits the Secretary of Defense to request a waiver only to address an immediate adverse effect on military operations, and requires a written explanation to Congress within 24 hours, including confirmation that qualified U.S. vessels are insufficient. The law sets no test that the cargo be military-grade fuel; ordinary gasoline or asphalt can serve an operation. What it demands is a demonstrated link between each movement and an immediate military need, and proof that American ships could not carry it.
More than four months in, that explanation and confirmation have not been made public. The record the administration has released, CBP guidance and MARAD voyage reports, describes commercial petroleum and energy cargoes whose connection to an immediate military operation has not been publicly explained. The domestic fleet, meanwhile, was available: an AMP-commissioned after-action analysis, an interested-party source, reported that U.S.-flag tankers and barges were available for 58 of 67 qualifying movements, roughly 87%. A blanket, nationwide, 150-day authorization is a poor fit for an immediate military emergency. Democratic transportation leaders have asked the administration to identify the military operation behind each voyage, and 52 House Republicans have separately urged the waiver to expire.
A Coastline Opened to China and Russia
The waiver has opened America’s domestic shipping lanes to the maritime rival the administration says it fears most. An analysis of MARAD reporting through July 2 shows that of the 145 movements run under the waiver, roughly 34.1 million barrels in all, nearly a third carried a China linkage. Some 30.3% involved a vessel tied to China or Hong Kong through its registered owner, its builder, or its technical manager; 23.4% were built in China, and 11.0% were Chinese- or Hong Kong-owned. These are overlapping voyage counts from an interested source rather than audited, volume-weighted shares. The broad measure reaches nearly one-third of movements, and direct Chinese or Hong Kong ownership accounts for 11%. Both show that China-linked firms gained meaningful access to coastwise trade under a national-defense waiver.
FIGURE 1:
The Jin Zhou Wan is the concrete case. It is operated by COSCO Shipping Asphalt (Hainan), part of China COSCO Shipping Corporation, whose parent group appears on the Department of Defense’s Section 1260H list of Chinese military companies, and it has run at least two domestic U.S. routes under a waiver justified by national defense. Russian-crewed tankers have joined it: the Maltese-flagged Pyxis Lamda, whose senior officers were identified as Russian nationals by maritime-industry reporting, sailed past MacDill Air Force Base on a run from Lake Charles to Tampa, underscoring the political sensitivity of admitting foreign crews to domestic trade.
The contradiction with the administration’s own agenda is glaring. The White House Maritime Action Plan warns that less than 1% of the world’s commercial ships are built in the United States and calls for rebuilding the domestic industrial base. A rebuilding strategy runs on predictable domestic demand. Repeated blanket waivers shift cargo demand to foreign vessels, operators, and crews, weakening the domestic demand signal on which American yards rely.
Coastwise Freight Was Not the Principal Driver of Fuel Prices
The waiver targeted a cost that barely moves the price of fuel. The Jones Act governs business-to-business freight between U.S. ports, the leg where a refiner contracts a carrier to move gasoline from Texas to the Northeast, and that freight is a few cents a gallon. Foreign vessels reduced freight costs on some routes and increased them on others. The industry analysis put a Richmond-to-Los Angeles movement 2.4 cents a gallon cheaper on a foreign vessel, but a New Orleans-to-Port Everglades run 0.6 cents cheaper on a Jones Act ship. The available evidence does not show that these route-level differences produced any measurable reduction in national retail fuel prices.
A much larger source of pressure came from the global refined-product market, reflected in exceptionally wide refining margins. The 3-2-1 crack spread, the standard gauge of refining profitability, climbed from about $45 a barrel in early June to nearly $70 by mid-July. It is an indicator of margins rather than a company’s net profit, but it shows how far gasoline and diesel values ran ahead of crude while the Jones Act was blamed for prices it could only marginally affect.
FIGURE 2:
Elevated Exports Undercut the Case for a Generalized Shortage
Gross petroleum exports remained exceptionally high throughout the waiver. Across the 18 EIA reporting weeks of the waiver, gross U.S. exports of crude oil and petroleum products averaged about 12.3 million barrels a day, roughly 17% above the same weeks in 2025, and totaled around 1.5 billion barrels. That does not rule out regional or product-specific constraints, but it undermines any claim of generalized national scarcity and raises the administration’s burden to identify the particular product, market, and military operation behind each movement.
FIGURE 3:
Gross exports span crude oil, propane, gasoline, distillate, and jet fuel, and a barrel sold from the Gulf is not always the grade a coastal refinery needs. The regional mismatches are real, and the Associated Press noted that much U.S. crude is light and sweet while many coastal refineries are built for heavier grades. Those mismatches argue for targeted, voyage-specific relief, not a nationwide, 150-day exemption.
The Waiver Diverts Demand From an Already Thin Fleet
The waiver diverts coastwise demand from a domestic fleet that is already thin. MARAD counts only 188 large oceangoing U.S.-flag vessels, 92 of them Jones Act-eligible, and classifies 170 as militarily useful. That fleet is the surge capacity the nation draws on in a crisis, and it is already stretched. Each foreign movement reduces the cargo available to support domestic vessel utilization, mariner employment, and future investment. Industry executives also report that charterers are invoking the waiver in rate negotiations, though public market data do not yet quantify the effect.
The Case for the Jones Act
Critics call the Jones Act a protectionist tax, and its costs are real. CRS estimates a U.S.-built tanker can cost about four times the world price. That premium is also what sustains the large oceangoing commercial shipbuilding base, which CRS concludes the domestic-build requirement largely underpins. The waiver strips away the law’s costs and its benefits at once.
If domestic shipping were the reason fuel is expensive, suspending it would have lowered prices. It did not, because freight is a marginal share of the delivered cost. What the waiver surrendered is a fleet the nation owns and crews, the domestic maritime assets that helped restore the Port of Baltimore’s full channel within 11 weeks after the Francis Scott Key Bridge collapse, and a shipbuilding base for which guaranteed domestic demand provides the principal commercial foundation.
Recommendation: Let the Waiver Expire
Opposition spans both parties. In late June, 52 House Republicans, including Speaker Mike Johnson and Majority Leader Steve Scalise, urged the president to let the waiver expire on August 16. Democratic transportation leaders separately called the waiver a direct threat to the maritime industry and demanded the voyage-by-voyage military justification.
The path is straightforward. Let the authorization lapse on August 16, its loading deadline for covered cargo. Release publicly the written explanation and confirmation that Section 501(a) requires the Defense Secretary to provide Congress. Reserve any future relief for specific, documented shortages that U.S. vessels genuinely cannot meet, using the narrow vessel-by-vessel authority Section 501(b) provides. And pair it with the shipbuilding investment the administration’s own Maritime Action Plan calls for.
The Jones Act is the original America First law. Waiving it while petroleum exports remained elevated transferred coastwise revenue to foreign carriers and weakened the demand certainty on which American vessels, mariners, and shipyards depend. The administration should let the authorization lapse on August 16 and reserve any future relief for specific shortages that qualified U.S. vessels demonstrably cannot meet.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
The Jones Act: An America First Law, Waived for China’s Benefit
The 2026 Jones Act waiver has not been shown to meet its legal test, opened America’s coastwise trade to Chinese- and Russian-linked ships, and produced no demonstrated national fuel-price relief. It should expire on August 16.
KEY FINDINGS:
Introduction
In late June, the Chinese-flagged tanker Jin Zhou Wan loaded asphalt in Paulsboro, New Jersey, and carried it to Baltimore. Weeks earlier it had run bitumen from Harvey, Louisiana, to New Haven. Both voyages move cargo between U.S. ports, the work the law reserves for American-built, American-owned, American-flagged, and American-crewed vessels. They were legal only because the Trump administration has suspended the Jones Act. The vessel is operated by COSCO Shipping Asphalt (Hainan), part of China COSCO Shipping Corporation, whose parent group appears on the Department of Defense’s Section 1260H list of Chinese military companies.
The Jones Act waiver issued during the Strait of Hormuz crisis has become a policy that struggles to justify itself. It was cast as an emergency measure for national defense and lower fuel prices. More than four months later, the administration has not publicly shown the military necessity the law demands. The waiver has shifted a substantial share of coastwise movements to foreign and adversary-linked vessels, and it produced no demonstrated reduction in the fuel prices that global markets and record refining margins were driving. The waiver should expire on August 16.
The Waiver’s Legal Case Has Not Been Made
The administration has not publicly demonstrated that the waiver met the standard that justifies one. Section 501(a) permits the Secretary of Defense to request a waiver only to address an immediate adverse effect on military operations, and requires a written explanation to Congress within 24 hours, including confirmation that qualified U.S. vessels are insufficient. The law sets no test that the cargo be military-grade fuel; ordinary gasoline or asphalt can serve an operation. What it demands is a demonstrated link between each movement and an immediate military need, and proof that American ships could not carry it.
More than four months in, that explanation and confirmation have not been made public. The record the administration has released, CBP guidance and MARAD voyage reports, describes commercial petroleum and energy cargoes whose connection to an immediate military operation has not been publicly explained. The domestic fleet, meanwhile, was available: an AMP-commissioned after-action analysis, an interested-party source, reported that U.S.-flag tankers and barges were available for 58 of 67 qualifying movements, roughly 87%. A blanket, nationwide, 150-day authorization is a poor fit for an immediate military emergency. Democratic transportation leaders have asked the administration to identify the military operation behind each voyage, and 52 House Republicans have separately urged the waiver to expire.
A Coastline Opened to China and Russia
The waiver has opened America’s domestic shipping lanes to the maritime rival the administration says it fears most. An analysis of MARAD reporting through July 2 shows that of the 145 movements run under the waiver, roughly 34.1 million barrels in all, nearly a third carried a China linkage. Some 30.3% involved a vessel tied to China or Hong Kong through its registered owner, its builder, or its technical manager; 23.4% were built in China, and 11.0% were Chinese- or Hong Kong-owned. These are overlapping voyage counts from an interested source rather than audited, volume-weighted shares. The broad measure reaches nearly one-third of movements, and direct Chinese or Hong Kong ownership accounts for 11%. Both show that China-linked firms gained meaningful access to coastwise trade under a national-defense waiver.
FIGURE 1:
The Jin Zhou Wan is the concrete case. It is operated by COSCO Shipping Asphalt (Hainan), part of China COSCO Shipping Corporation, whose parent group appears on the Department of Defense’s Section 1260H list of Chinese military companies, and it has run at least two domestic U.S. routes under a waiver justified by national defense. Russian-crewed tankers have joined it: the Maltese-flagged Pyxis Lamda, whose senior officers were identified as Russian nationals by maritime-industry reporting, sailed past MacDill Air Force Base on a run from Lake Charles to Tampa, underscoring the political sensitivity of admitting foreign crews to domestic trade.
The contradiction with the administration’s own agenda is glaring. The White House Maritime Action Plan warns that less than 1% of the world’s commercial ships are built in the United States and calls for rebuilding the domestic industrial base. A rebuilding strategy runs on predictable domestic demand. Repeated blanket waivers shift cargo demand to foreign vessels, operators, and crews, weakening the domestic demand signal on which American yards rely.
Coastwise Freight Was Not the Principal Driver of Fuel Prices
The waiver targeted a cost that barely moves the price of fuel. The Jones Act governs business-to-business freight between U.S. ports, the leg where a refiner contracts a carrier to move gasoline from Texas to the Northeast, and that freight is a few cents a gallon. Foreign vessels reduced freight costs on some routes and increased them on others. The industry analysis put a Richmond-to-Los Angeles movement 2.4 cents a gallon cheaper on a foreign vessel, but a New Orleans-to-Port Everglades run 0.6 cents cheaper on a Jones Act ship. The available evidence does not show that these route-level differences produced any measurable reduction in national retail fuel prices.
A much larger source of pressure came from the global refined-product market, reflected in exceptionally wide refining margins. The 3-2-1 crack spread, the standard gauge of refining profitability, climbed from about $45 a barrel in early June to nearly $70 by mid-July. It is an indicator of margins rather than a company’s net profit, but it shows how far gasoline and diesel values ran ahead of crude while the Jones Act was blamed for prices it could only marginally affect.
FIGURE 2:
Elevated Exports Undercut the Case for a Generalized Shortage
Gross petroleum exports remained exceptionally high throughout the waiver. Across the 18 EIA reporting weeks of the waiver, gross U.S. exports of crude oil and petroleum products averaged about 12.3 million barrels a day, roughly 17% above the same weeks in 2025, and totaled around 1.5 billion barrels. That does not rule out regional or product-specific constraints, but it undermines any claim of generalized national scarcity and raises the administration’s burden to identify the particular product, market, and military operation behind each movement.
FIGURE 3:
Gross exports span crude oil, propane, gasoline, distillate, and jet fuel, and a barrel sold from the Gulf is not always the grade a coastal refinery needs. The regional mismatches are real, and the Associated Press noted that much U.S. crude is light and sweet while many coastal refineries are built for heavier grades. Those mismatches argue for targeted, voyage-specific relief, not a nationwide, 150-day exemption.
The Waiver Diverts Demand From an Already Thin Fleet
The waiver diverts coastwise demand from a domestic fleet that is already thin. MARAD counts only 188 large oceangoing U.S.-flag vessels, 92 of them Jones Act-eligible, and classifies 170 as militarily useful. That fleet is the surge capacity the nation draws on in a crisis, and it is already stretched. Each foreign movement reduces the cargo available to support domestic vessel utilization, mariner employment, and future investment. Industry executives also report that charterers are invoking the waiver in rate negotiations, though public market data do not yet quantify the effect.
The Case for the Jones Act
Critics call the Jones Act a protectionist tax, and its costs are real. CRS estimates a U.S.-built tanker can cost about four times the world price. That premium is also what sustains the large oceangoing commercial shipbuilding base, which CRS concludes the domestic-build requirement largely underpins. The waiver strips away the law’s costs and its benefits at once.
If domestic shipping were the reason fuel is expensive, suspending it would have lowered prices. It did not, because freight is a marginal share of the delivered cost. What the waiver surrendered is a fleet the nation owns and crews, the domestic maritime assets that helped restore the Port of Baltimore’s full channel within 11 weeks after the Francis Scott Key Bridge collapse, and a shipbuilding base for which guaranteed domestic demand provides the principal commercial foundation.
Recommendation: Let the Waiver Expire
Opposition spans both parties. In late June, 52 House Republicans, including Speaker Mike Johnson and Majority Leader Steve Scalise, urged the president to let the waiver expire on August 16. Democratic transportation leaders separately called the waiver a direct threat to the maritime industry and demanded the voyage-by-voyage military justification.
The path is straightforward. Let the authorization lapse on August 16, its loading deadline for covered cargo. Release publicly the written explanation and confirmation that Section 501(a) requires the Defense Secretary to provide Congress. Reserve any future relief for specific, documented shortages that U.S. vessels genuinely cannot meet, using the narrow vessel-by-vessel authority Section 501(b) provides. And pair it with the shipbuilding investment the administration’s own Maritime Action Plan calls for.
The Jones Act is the original America First law. Waiving it while petroleum exports remained elevated transferred coastwise revenue to foreign carriers and weakened the demand certainty on which American vessels, mariners, and shipyards depend. The administration should let the authorization lapse on August 16 and reserve any future relief for specific shortages that qualified U.S. vessels demonstrably cannot meet.
References:
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CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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