McCown says Jones Act waiver hasn’t reduced gas prices but made profits for profiteers

John McCown, maritime analyst and publisher of the McCown Report, says the Trump administration’s stated goal of instituting a waiver of the Jones Act to allow foreign flag carriers to transport petroleum products between US ports so as to reduce high gasoline prices has not succeeded.

McCown spoke to the Propeller Club of Northern California (PCNC) on July 28^th where he said that the Trump administration instituted and extended the waiver to ostensibly bring in lower cost foreign flag tankers to reduce gasoline prices that had spiked as a result of the War with Iran: “The President's press secretary said this (Jones Act Waiver) was to relieve short term problems in the oil market. Well…the best analysis that I highlighted… concluded that the total cost savings from lower Jones Act movements of gasoline would be something like 2/100 of a cent of a gallon… So, it's not achieving the purpose.”

Profits and Profiteering

The result of the waiver has been profiteering: “Most of these voyages… involve petroleum… The other thing that they're not talking about is all of the pricing on these. Most of them are actually at or above the rates the Jones Act vessels get. In fact, some of them materially above. And the reason for that goes back to why these voyages are occurring. We had a major dislocation in the oil market (caused by the closure of the Strait of Hormuz) that created arbitrage opportunities. For instance, California's price went up something like $1.50 a gallon versus a nationwide average of $1.10. That led to an arbitrage situation. You have trading companies that are indifferent to how much they pay for freight. But if they can lock in something and they could pay a million dollars a day to rent a tanker, if that works out to a profit, they're going to do that. That has nothing to do with a real underlying market. So, they're not achieving the purpose they were set out to do. They are also, however, hindering initiatives that are underway and long-term goals.”

McCown said the Trump administration’s lifting of Jones Act restrictions on foreign flag vessel shipments between US ports is not consistent with the administration’s support for the US maritime industry’s revival: “There are just a lot of baffling things. Commodities that are moving. For instance, there have been three voyages by Chinese flag ships by COSCO, moving asphalt to Maryland. That's hardly a national security issue…”

This is particularly true for the Trump administration initiatives to support new shipbuilding in the United States: “things like the (Hanwha) Korean shipyard in Philadelphia, a fascinating company and Saronic Technologies, what they're doing and actually building vessels and eventually hope to be building commercial vessels proposed for Brownsville, Texas. Those are all initiatives that are… fundamentally based on the rules that were in play when they made those investments. So, there's a fundamental unfairness to that. And it also is inconsistent with the long- term goals that have been articulated by this administration.”

McCown added, “What's amazing to me is there probably hasn't been any administration that has had so many initiatives and stated plans and actual actions that are beneficial to the maritime sector, from shipbuilding to others across the board and… in the middle of that to kind of take a knife to the heart of the merchant marine is just really baffling. I mean, again, where you have Chinese ships and Russian ships going into US ports in the interior, when the same administration wanted to put in place these US Trade Representative (USTR) fees on Chinese ships, it would be up to $10 million per port call just for a Chinese ship visiting and then to turn around and say, well, we don't want Chinese built ships, but it's fine with the COSCO (China Ocean Shipping Company) ship to have three voyages to move asphalt. It's just nonsensical.”

AWO Response

Jennifer Carpenter, President and CEO of American Waterways Operators (AWO) issued the following statement in response to an AJOT inquiry: “AWO continues to work alongside Congress on both sides of the aisle, including Republican leadership, in strongly urging President Trump not to extend this Jones Act waiver. The waiver is harming American maritime jobs, eroding investment in US maritime, and needlessly allowing Chinese and other foreign operators to move cargo on our domestic waterways at the expense of safety, supply chain integrity, and national security – all while having no impact on the price of gasoline. President Trump needs to trust his instincts and truly put Americans first by ending the waiver.”

On July 16^th, AWO issued a statement to its members and allies stating: “Over the past 72 hours, AWO and the American Maritime Partnership have been engaged in intense behind-the-scenes advocacy as the White House approaches a decision point on a potential extension of the Jones Act waiver. We need your help now to turn up the volume and enhance those efforts. As reported by multiple media outlets, high-level Administration officials met this week to consider an extension of the waiver, and a White House announcement could be made at any time.”

The US Department of Homeland Security (DHS) approved a 90-day extension of the waiver, commencing May 18, 2026, that extends to August 16, 2026, unless it is extended.

The Trump administration rationale for the waiver was that it would lower gasoline prices that had spiked as a result of the Iran War and the shutting off of Middle East oil supplies when the Strait of Hormuz was shut.

Report Disputes Waiver Benefit

The American Maritime Partnership commissioned Navigistics Consulting to produce a report: ‘Jones Act 2026 Waiver After Action Report.’ That report examined the effects of the Jones Act waiver on the U.S. economy. Key findings of the report released on June 30^th, 2026, were:

• No Military Necessity – Of the 78 waiver voyages documented in the US Maritime Administration’s (MARAD) June 1 report, not one met the only legal standard required to justify a Jones Act waiver. Every movement involved commercial-grade materials incompatible with DoD fuel requirements.
• US Ships Were Available and Ready – American vessels were available for 86.5% of qualifying voyages. The waiver wasn’t a necessity; it was a choice that bypassed a ready and willing US fleet.
• The Waiver Is Handing Cargo to China – Foreign-flag vessels built in China (23.1%) and under Chinese control (18.5%) are now moving American domestic cargo that US ships were available to carry – opening domestic shipping lanes to foreign competitors at a moment of heightened national security concern.
• Gas Prices Haven’t Moved – An 11-week analysis found no credible evidence of price relief at the pump. In several routes, Jones Act vessels were actually cheaper than their foreign-flag counterparts. Meanwhile, only ~6.5% … of US gasoline is transported on vessels. American consumers are paying the price for a policy that isn’t delivering what was promised.

Cato Institute

McCown said that much of the publicity opposing the Jones Act has come from the conservative think-tank the Cato Institute: “What's kind of an overriding as I have been going back to, even before these waivers, is I have found that it is Cato, who's been kind of the key player behind the scenes on this. And Cato has been attacking the Jones Act… since 2000… And… I've really delved into and seen the history of what Cato's doing and developed some very strong views... It's really not research. Even though Cato is a reputable think tank, what the Cato folks that are involved in (the Jones Act) it's little more than lobbying.”

Cargo Volumes Frontloaded In 2026

McCown also said that there is evidence that importers front-loaded the ordering of import cargoes in the first half of 2026 that could result in lower volumes in the second half of 2026: “But in June, our year-over-year volume was up 14%. It was up 15% the month before in May. And again, that's not a natural strength. I think that's mostly shippers front-end loading out of fear that tariffs are going to come and be even higher. And it turned out that fear has been accurate.”

The other trend is weaker exports: “And despite the roller coaster ride in terms of inbound, and then this is with all ports, which I've always found when you aggregate figures, you have much more of a story. Many of you all are used to looking at the figures that come out from one port. And so here you see the rather dramatic and volatile movement of the inbound against a very stagnant and broadly kind of weaker outbound… Much of those declines, unfortunately, are the flip side of the first group of tariffs. And what I've come to find is the tariffs in the end don't impact overall volume as much as you think, but they do impact outbound volume. And that's because they're retaliatory tariffs.”