Wednesday, October 21, 2020
Hawai'i Free Press

Current Articles | Archives

Sunday, September 22, 2019
Effects of the Jones Act
By Tom Yamachika @ 5:00 AM :: 1680 Views :: Jones Act

Effects of the Jones Act
by Tom Yamachika, President, Tax Foundation Hawaii

Here in Hawaii, we are intensely dependent on goods that come into the State from faraway places, whether it be the U.S. mainland, Asia, or anywhere else in the world.  Part of the Merchant Marine Act of 1920, more commonly known as the “Jones Act,” affects us greatly because it prohibits any ship from carrying passengers or cargo between two U.S. ports unless the ship is American built, owned, crewed, and flagged.  A recent working paper released by the University of Hawaii Economic Research Organization, or UHERO, collects and reports hard data on the effects of the Jones Act.

The points made in the study merit further discussion among policymakers both here and nationally.  Among them:

When the Jones Act was passed in the 1920’s, the United States was a major power in the shipping industry.  Since then, Asian shipbuilding rose dramatically and left us in the dust, and the U.S. water shipping capability tanked.  In 1960 there were nearly 3000 U.S.-flagged merchant ships.  In 2016 there were fewer than 200.  

The Jones Act has restricted domestic water trade.  Goods that would normally be transported by sea between U.S. ports instead must be put on a truck or airplane.  As domestic water transportation has become more difficult, states and the people in them must acquire goods from overseas (those goods then may be subject to customs duties and tariffs) or pay more to get the goods put on a plane.  As a result, prices of the goods rise.  The effects are worse in non-contiguous states that are most reliant on water transportation, primarily Alaska and Hawaii, although effects are felt heavily in other coastal states such as California, Massachusetts, and New York.  One of the featured contributions of the UHERO study is the marshalliing of empirical data to support those conclusions.

Proponents of the Act, such as the late Sen. Daniel Inouye, emphasized that the Act’s requirements were “tied directly to national security and the importance of ensuring healthy American shipyards that may be called upon in times of national emergency.”  Yet the federal government found it necessary to waive Jones Act requirements temporarily in order to assist in recovery efforts after Hurricanes Katrina (2005), Sandy (2012), Harvey and Irma (2017), and Maria (2017).

Proponents of the Act have also argued that it would be unfair to allow foreign operators to compete for American cargo without the responsibility of complying with U.S. laws, including environmental protection laws such as ocean dumping and marine mammal protection rules.  However, environmental protection laws and treaties can be enforced in the U.S. regardless of who is violating the law.  In 2017, for example, two Greek shipping companies were penalized $2.7 million after being convicted on federal charges stemming from discharging oily waste into the marine environment.  In addition, the UHERO study argues that the Jones Act harms the environment by forcing transportation of goods to be done on motor vehicles and aircraft, both of which pollute the environment more significantly than watercraft.

Finally, policymakers here, especially, should be considering a related policy question.  Our state can’t tax air transportation of passengers or cargo because federal law prohibits it.  However, we can and do apply the GET or the Public Service Company Tax to other transportation carriers.  These taxes ultimately get passed on to the consumers of the goods transported, driving up our already stratospheric cost of living.  Are those taxes a good idea, or should we be looking at taking them away to ease the burden on all of us?


RELATED: Cabotage Sabotage? The Curious Case of the Jones Act


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

ACA Signups Hawaii


Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni


Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Ballotpedia Hawaii

Better Hawaii

Blaisdell Memorial Project

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

Coffee Break

DVids Hawaii

E Hana Kakou Kelii Akina


Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation



Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes


Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii


National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Hawaiian

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii


OHA Lies

Opt Out Today

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii


Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

Sink the Jones Act

Statehood for Guam

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii