What is America Jones Act: America A major policy decision has come to light amid rising fuel prices and supply crisis. President Donald Trump has temporarily suspended a century-old shipping law to ease the transportation of oil, gas and other essential commodities within the country. The purpose of this step is to control rising costs and maintain smooth energy supply.
Under this decision, foreign flagged ships will now be able to carry goods between American ports for the next 60 days. The White House believes that with this the supply of essential commodities like oil, natural gas, fertilizers and coal will continue without interruption and the pressure in the market will be reduced.
What is Jones Act?
The Jones Act, also known as the Merchant Marine Act of 1920, was created to strengthen America’s maritime trade. Under this law, a ship carrying goods from one port of America to another must be built in America, owned by American citizens and the crew must also be predominantly American. This simply means that foreign ships are not allowed to engage in domestic maritime trade unless special exemption is granted.
Why was temporary exemption given?
The government has given this relaxation in the national interest, so that the supply chain can be strengthened amid the current crisis. Along with energy products, this discount will also be applicable on fertilizers, which are in huge demand during the current farming season. Global shipping has been badly affected due to increasing tensions in the Strait of Hormuz and the Iran-Israel conflict. There has been obstruction in the movement of oil tankers, due to which exports from the Middle East have been affected. Its impact is not limited to fuel only, the supply of medicines, computer chips and other essential goods has also been affected.
Will petrol and diesel become cheaper with this decision?
Experts believe that this decision will make logistics easier, but a big fall in prices is not expected. “This exemption will simplify logistics, making the flow of products a little cheaper and easier,” said GasBuddy analyst Patrick de Haan. However, he also clarified that “At this time, it will not have any ‘obvious’ impact in reducing prices at petrol pumps, it will only offset the increase in retail prices. My estimate is that this could offset the price increase of 3 to 10 cents per gallon ($0.007 to $0.02 per liter).
Why were questions raised on the decision?
This decision is also being criticized. Organizations associated with the American maritime industry say that this could cause harm to domestic companies and workers. He also believes that allowing foreign ships will not reduce costs much.
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