Puerto Rico's Hurricane Recovery Just Got Even More Expensive
DHS ends waiver of protectionist shipping law that drives up costs.
Even though Puerto Rico has months of work ahead to recover from Hurricane Maria, the Department of Homeland Security will not extend a waiver that exempted the island from a nasty federal law that drives up shipping costs to the island.
The Jones Act—technically known as the Merchant Marine Act of 1920—requires that ships that travel from port to port in America and its territories be made in America and owned and crewed by Americans. This means that foreign ships bringing goods to import into America can stop in only one port, unless it travels to ports of other countries between stops.
There's more to the law than this particular part, but this part is a blatant federal protection racket for the American shipping industry. Studies have shown that it drives up the price of shipping goods to Puerto Rico, as much as doubling them when compared to costs to ship to nearby island countries that aren't affected by the law. It's also partly responsible for higher prices in Hawaii and Alaska.
When Hurricane Maria first approached, President Donald Trump's administration temporarily waived the Jones Act's shipping requirements for fuel only. Then after some hemming and hawing and bad publicity, they lifted the Jones Act for all shipping until Sunday. But the Department of Homeland Security says they won't extend the waiver any further.
The feds cannot simply waive the law for as long as they want. A DHS spokesperson tells the Huffington Post the waivers have to be related to national security matters and can't simply be implemented because restricting shipping costs more. Making sure that U.S. shippers can monopolize Puerto Rican shipments and charge more is almost certainly the point of the law in the first place.
That's why when the hurricane hit the island, I pointed directly to Congress to try to get rid of the law. That's unfortunately not going to happen, at least not in full. Sens. John McCain (R-Arizona) and Mike Lee (R-Utah) have introduced legislation that will exempt Puerto Rico and only Puerto Rico from the Jones Act (Sorry, Hawaii!). But the White House doesn't appear to be on board with the effort, and it's not really surprising given Trump's love of protectionist trade practices.
Small UPDATE: According to the Department of Homeland Security, 14 ships have notified the agency they were taking advantage of the waiver. Notifying the agency is voluntary, so the number may be higher.
Below, ReasonTV on why the Jones Act is bad and needs to be eliminated: