Merchant Marine Act of 1920 (Jones Act — Cabotage Law)

The Merchant Marine Act of 1920, commonly known as the Jones Act (not to be confused with the Jones-Shafroth Act of 1917), is a federal statute that requires all goods shipped between U.S. ports to be transported on ships that are American-built, American-owned, American-flagged, and American-crewed.

Section 27 of the Act (46 U.S.C. § 55102) — the cabotage provision — has had an outsized impact on Puerto Rico because the island depends on maritime shipping for virtually all consumer goods, food, fuel, and raw materials.

Economic Impact on Puerto Rico:
- The New York Federal Reserve estimated in 2012 that Jones Act shipping costs are approximately twice as high as foreign-flag shipping costs
- A 2019 study by economists at the University of Puerto Rico found that the Jones Act costs Puerto Rico's economy $1.5-2.0 billion annually
- Consumer prices in Puerto Rico are estimated to be 15-20% higher than they would be without cabotage restrictions
- The cost of shipping a container from the U.S. East Coast to Puerto Rico is approximately double the cost of shipping the same container to nearby Caribbean islands not subject to the Jones Act

Failed Reform Efforts: Multiple bills have been introduced in Congress to exempt Puerto Rico from the Jones Act, including the Puerto Rico Maritime Shipping Act and various amendments. All have failed, largely due to lobbying from the American maritime industry.

Temporary Waivers: After Hurricane María in September 2017, the Trump administration initially refused to waive the Jones Act for Puerto Rico (despite having waived it for Texas and Florida after Hurricanes Harvey and Irma). A 10-day waiver was eventually granted on September 28, 2017 — eight days after María made landfall — only after intense public pressure.

The Jones Act represents one of the most concrete mechanisms through which colonial status extracts wealth from Puerto Rico: an island that cannot feed itself or fuel itself is required to pay a premium for every good that arrives by sea, enriching American shipping companies at the expense of Puerto Rican consumers.