Fox News senior congressional correspondent Chad Pergram reports on China imposing an 84% tariff on U.S. goods following President Donald Trump’s decision to implement a 104% tariff on China.
President Donald Trump is taking steps to rejuvenate the declining U.S. shipbuilding industry, which has fallen significantly behind China. He has recently signed an executive order to initiate a series of measures aimed at promoting growth within the industry.
The executive order, issued on April 10, instructs government agencies to develop a Maritime Action Plan. It also tasks the United States Trade Representative with proposing recommendations to address China’s “anticompetitive actions within the shipbuilding industry,” among other objectives.
A key element in this context is the century-old Jones Act, a component of the Merchant Marine Act of 1920. The Act mandates that only U.S. ships are permitted to transport goods between U.S. ports, requires that 75% of the crew members are U.S. citizens, and stipulates that these vessels must be built in the U.S. and owned by American citizens. While supporters argue that the Jones Act is essential for national security, critics claim it significantly hampers the U.S. shipbuilding industry’s competitiveness.
Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, asserted that revoking the Jones Act would be a crucial first step in reviving the shipping industry. De Rugy argues that the law leads to increased shipbuilding costs in the U.S., compared to nations like China, South Korea, and Japan, thereby resulting in an outdated and aging fleet.
Colin Grabow, associate director at the Cato Institute’s Center for Trade Policy Studies, notes that while the Jones Act is not solely responsible for issues in the shipbuilding industry, it has significantly undermined U.S. shipbuilding. He believes that without the Jones Act, the industry would be more competitive.
Senator Mike Lee, R-Utah, has introduced the Open America’s Waterways Act in January 2024, proposing to repeal the law. Despite previous unsuccessful attempts to repeal the Jones Act, the law retains strong bipartisan support, with advocates asserting its importance for national security by maintaining a fleet capable of transporting military cargo during conflicts. Military leaders, including Air Force Gen. Randall Reed of U.S. Transportation Command, have voiced support for the Jones Act, emphasizing its role in military readiness and homeland security.
The Navy League of the United States, a nonprofit advocating for maritime services, also supports the Act, citing its contribution to the Coast Guard’s border security mission. It argues that repealing the Jones Act would impose new security challenges related to foreign mariners.
Trump has shown interest in discussing potential reforms, suggesting work with Congress to authorize the purchase of ships from foreign countries. However, specific details have not been provided. According to Grabow, any such moves could challenge the arguments of Jones Act supporters. Despite increased attention on the issue, Grabow remains skeptical about the success of efforts to repeal the law, acknowledging that public discussion around revitalizing U.S. shipbuilding underscores the law’s shortcomings.