Little-Known Laws That Cripple American Trade

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Ludwig von Mises Institute:

Little-Known Laws That Cripple American Trade

MARCH 3, 2015Gary Galles

The harm that Britain’s protectionist Navigation Acts imposed on the colonies was a major impetus for the American Revolution. But the United States did not abandon those unjustifiable restrictions. Even before the Bill of Rights was adopted, Congress in 1789 enacted similar protectionist restrictions on coastal shipping. It is centuries past time to eliminate such harmful restrictions and the Jones Act that is their modern progeny.

What is the Jones Act?

The Jones Act (1920) mimics the rationale and terms of Britain’s Navigation Acts. It was meant to guarantee a merchant marine fleet “for the national defense and the development of the domestic and foreign commerce of the United States,” that was “capable of serving as a naval and military auxiliary in time of war or national emergency.” It also restricts trade between American ports to vessels built and owned by Americans, and to vessels whose crew is at least three-quarters American. Unfortunately it works against its stated goals, and does so at a steep cost.