President Donald Trump waived the Jones Act in March, calling it a temporary measure to ease fuel prices after the Iran war cut oil supplies. Prices haven’t fallen, but the market has started recalibrating whether America’s foundational maritime and homeland security law still matters.
For most Americans, this feels new. But for the U.S. offshore marine industry, the segment that builds, supplies, and decommissions offshore energy assets, we have seen this before. For decades, large interests have influenced the enforcement of the law. Consumers rarely notice because profits stay with the profiteers. Now, everyone is paying attention because gas prices aren’t going down.
The Jones Act requires vessels transporting cargo between U.S. points to be American-built, American-owned, and American-crewed. Its purpose is to sustain a domestic maritime industry capable of supporting both commerce and national defense. But over the past 50 years, U.S. Customs and Border Protection issued hundreds of administrative “letter rulings” that carved out broad non-statutory exceptions for offshore energy, including pipeline laying, cable installation, heavy-lift operations, and decommissioning on the Outer Continental Shelf.
JONES ACT: THE ORIGINAL AMERICA FIRST LAW
These rulings were never called waivers. They were not authorized by either the secretary of homeland security or war, nor subject to congressional review or approval. But their effect was identical: foreign-built, foreign-crewed vessels performed work the Jones Act was written to reserve for Americans.
The market responded as expected. In sectors where no waiver rulings were issued, U.S. industry grew. U.S. shipowners invested in new vessels, shipyards modernized, and American mariners built careers. Analysts project the U.S. offshore vessel market will reach nearly $8 billion by 2034, growing at a compound annual rate of 5.58%.
In segments covered by letter rulings, the opposite happened. Foreign operators, backed by cheap foreign labor and foreign government subsidies, undercut American companies that do not receive government support and are legally required to employ U.S. mariners. Shipyards lost orders. Americans saw opportunities disappear, not because of skill or quality, but because the rules quietly shifted in favor of foreign workers.
In these segments, the U.S. fell behind Europe and China in subsea cables, heavy lift, and other specialized offshore assets. Those capabilities were built by companies that profited from unrestricted access to what should have been an American market.
As developers grew accustomed to cheaper foreign vessels, they pushed to extend those permissions. Each letter ruling begat another, widening the scope of de facto waivers. Projects were structured around the expectation that cheap foreign vessels would be used. Foreign operators prepositioned assets to capture American contracts. Financiers questioned whether investments in American-built vessels are commercially secure. Domestic operators hesitated before committing to new construction. Workforce development slowed. And American consumers never saw a benefit.
Proponents argued that these waivers were necessary to build a strong domestic offshore energy production. The promised expansion of domestic energy capacity never materialized. Offshore drilling in the U.S. is at one of its lowest levels, with fewer than 20 rigs (all foreign) working in U.S. waters today. Instead, the primary beneficiaries, large oil companies, profited from cheap foreign labor and vessels.
The signal sent by Trump’s waiver is identical to that sent by 50 years of CBP letter rulings. It tells the market that the Jones Act’s safeguards against unfair foreign influence are negotiable when big companies can skirt them for profit. Once that signal reaches investors and developers, behavior changes in ways that outlast the waiver.
It doesn’t have to work this way. In 2009, CBP announced it was considering ending two dozen offshore energy waivers. Just the announcement caused the domestic industry to invest more than $2 billion in advanced vessels to cover these segments. The shipyards that built those vessels are now building for the Navy. Rebuilding lost capacity is possible, but expensive and time-consuming. It is far easier to preserve industrial capacity than to reconstruct it from scratch.
Waiver advocates argue that today’s Jones Act fleet is inadequate and that pragmatism demands flexibility. But it’s not pragmatic to risk today’s prices or tomorrow’s security, and on the promises of those who stand to gain the most from the waivers. Letter rulings told the market that domestic investment in some offshore segments was risky. The cure for high gas prices cannot be more of the same medicine.
TRUMP’S JONES ACT WAIVER UNDERMINES HIS OWN MARITIME AGENDA
Trump has made industrial sovereignty central. His logic behind reshoring and defense investment is consistent: America cannot depend on foreign actors for the things that matter most.
Energy security and a maritime industry capable of supporting national defense matters. The Jones Act is not a relic or a technicality. It is the legal foundation for our sovereign domestic fleet, securing our maritime borders and serving as a military asset. Temporary waivers teach the market that the foundation is negotiable. The offshore energy sector already learned what that costs. The president should not repeat the lesson fleet-wide.
Aaron Smith is president and CEO of OMSA, the leading national trade association representing the U.S. offshore marine transportation industry. OMSA’s 170 member companies employ more than 12,000 American workers and operate the vessels supporting the nation’s offshore energy infrastructure. Aaron also serves as executive director of the Offshore Service Vessel Dynamic Positioning Authority (OSVDPA).