Date: Tuesday, January 26, 2021
Source: Freight Waves
President Joe Biden asserted “strong support” for the Jones Act as part of a “Made in America” executive order he plans to sign on Monday.
“The President will continue to be a strong advocate for the Jones Act and its mandate that only U.S.-flag vessels carry cargo between U.S. ports, which supports American production and America’s workers,” according to a summary of the order.
“With the signing of the 2021 National Defense Authorization Act (NDAA), the Jones Act has also been affirmed as an opportunity to invest in America’s workers as we build offshore renewable energy, in line with the President’s goals to build our clean energy future here in America.” Language included in the NDAA limits the ability to waive the Jones Act in certain cases.
The Jones Act, a 100-year-old law that requires ships moving between U.S. ports be built and crewed in the U.S. as well as being flagged in the U.S., is criticized by some as a protectionist regulation that raises prices for shippers — and ultimately consumers — due in part to higher U.S. labor costs.
Supporters assert that the law is essential to national security and U.S. jobs. The U.S. domestic maritime industry employs nearly 650,000 Americans across and contributes $154 billion annually to the economy, according to the American Maritime Partnership (AMP), which lobbies on behalf of the Jones Act.
The group noted that the 40,000 vessels that comprise the Jones Act fleet move nearly one billion tons of cargo annually, roughly a quarter of the nation’s freight.
“With this order, American Maritime will have greater confidence for the next several years to make investments in American vessels and maritime infrastructure while furthering environmental stewardship, efficiency and support of our homeland and national security objectives,” commented AMP President Mike Roberts.
“The ‘Buy American’ Executive Order issued today by President Biden will prioritize American innovation, ingenuity and craftsmanship that are pivotal to our national and economic security,” said Matthew Paxton, president of the Shipbuilders Council of America.
“Essential national and domestic security industries like the U.S. shipyard sector, and the maritime defense industrial base, will grow stronger because of the actions taken today, ensuring the future of America is made in America.”
The order is aimed at ensuring that U.S. taxpayer money is spent on American-made goods by American workers and with American-made component parts. “This Executive Order fulfills President Biden’s promise to make Buy American real and close loopholes that allow companies to offshore production and jobs while still qualifying for domestic preferences,” the order states.
Among other things, the order directs agencies to close loopholes in how domestic content is measured and increase domestic content requirements.
“Existing Buy American rules establish a domestic content threshold — the amount of a product that must be made in the U.S. for a purchase to qualify under Buy American law,” the order states. “This Executive Order directs an increase in both the threshold and the price preferences for domestic goods — the difference in price over which government can buy a product from a non-US supplier. It also updates how government decides if a product was sufficiently made in America, building a stronger foundation for the enforcement of Buy American laws.”