The Trump administration revealed a plan on Wednesday to combat the surging oil costs sparked by its own war against Iran, but after running the numbers, one policy think tank said that the move would likely save Americans only pennies at the pump – and could even raise prices for some.
The plan is to impose a 60-day waiver to the Jones Act, a 1920 shipping law that mandates goods transported between U.S. ports be carried only on U.S.-built ships. The waiver, according to White House Press Secretary Karoline Leavitt, would help “mitigate the short-term disruptions to the oil market” and “allow vital resources like oil, natural gas, fertilizer, and coal to flow freely to U.S. ports,” NBC News reported Wednesday.
The public policy think tank Center for American Progress, however, estimated that waiving the Jones Act would only have “limited cost-savings benefits,” and in some cases, actually increase prices at the pump for Americans.
“The measure could have limited cost-savings benefits, decreasing East Coast gasoline prices by just three cents per gallon and could even raise costs on the Gulf Coast,” reads the think tank’s report published last week ahead of Trump’s announcement.
The Gulf Coast is made up of five states: Texas, Louisiana, Mississippi, Alabama, and Florida. All voted for Trump in the three presidential elections since 2016.
“It would also sideline American shipbuilders and workers and allow the oil industry to continue to profit from high prices while reducing transport costs.”
The Trump administration’s attack on Iran has led the Middle Eastern nation to deny access to U.S.-aligned shipping vessels to the Strait of Hormuz, a crucial shipping route through which 20% of the world’s oil trade flows. Oil prices have skyrocketed as a result, reportedly sparking panic within the Trump administration.