There hasn’t been a better test of America’s maritime economy and laws than the war against Iran. Not only is the U.S. Navy’s own fleet getting a stress test, but the stresses on global shipping and logistics posed by the war taking place in the strategic Strait of Hormuz chokepoint are also revealing some points of stress in America’s shipping and shipbuilding industries.

The most obvious sign of America’s failed policies is the need for and subsequent heavy use of President Trump’s waiver of the Jones Act. The Jones Act bars foreign ships and crews from making intra-United States shipping runs. The Cato Institute has been tracking Jones Act waiver transits, and was up to 95 voyages as of June 8. These trips supplemented Jones Act-compliant ships, making it clear that America would do more intra-country shipping via the ocean if it had the capacity to do so. Here are some findings from Cato:

• The Gulf Coast to West Coast fuel trade springs to life: In the waiver’s first 50 days, foreign-flagged tankers moved approximately 1.59 million barrels of energy products (excluding renewable diesel) from the Gulf Coast to the West Coast, which is roughly four times the volume moved by water on that route in all of 2025. In the waiver’s first 70 days, more gasoline and jet fuel were moved from the Gulf Coast to the West Coast than in the entirety of 2020–2025.
• Puerto Rico purchases US propane: No liquefied petroleum gas (LPG) tankers exist in the Jones Act fleet. As a result, Puerto Rico had been effectively barred from bulk US propane purchases and was forced to import from distant sources. The waiver opened the global LPG fleet to domestic routes, allowing bulk propane to reach Puerto Rico from the US mainland for the first time.
• Ammonia reaches American farmers: Three voyages have carried anhydrous ammonia — a fertilizer and key precursor to other fertilizers — aboard LPG tankers.
• Crude reaches Pennsylvania: The waiver’s first 60 days saw four movements of crude oil, both Bakken oil and West Texas Intermediate, from Texas to the East Coast. In 2017, the CEO of a Jones Act tanker company acknowledged that without the law, “there probably would be more movements of crude oil from Texas to Philadelphia.” The waiver has borne that out.
• Foreign vessels have supplemented, not replaced, the Jones Act fleet: With the Jones Act tanker fleet fully employed, each foreign-flagged voyage represents demand that would otherwise have gone unmet.

One reason the Jone Act was created was to protect American shipbuilding capacity. If it has helped, the evidence is uncertain, as the American shipbuilding industry is a ghost of its former self. In Foreign Policy, Mary Bridges discusses what she thinks should be done to rebuild American shipbuilding, and the plans of the Trump administration and Congress. She writes:

Whatever Washington intends, its ability to sustain its global maritime ambitions has eroded. For years, U.S. shipyards have delivered well under 1 percent of global commercial tonnage. Singapore, a country smaller than the Atlanta metropolitan area, built more gross tonnage in 2024 than the entire United States. Roughly 90 percent of U.S. military equipment moves by sea, but the country’s shipyards can no longer reliably build or repair the vessels required. The government’s fleet of military cargo ships held in reserve for wartime sealift now averages 46 years old, more than twice the typical lifespan of a commercial vessel.

It’s not that the United States cannot build ships; in fact, it had created one of the world’s largest merchant marines by the end of World War I and grew an industry that, at its World War II peak, could build the nation’s entire prewar commercial tonnage in three years.

Reviving that industry will take more than piecemeal grants, scattered foreign investments, or the commissioning of a prestige battleship class. A turnaround will only happen by using tools that have worked in the past: public investment and public support.

Bridges applauds President Trump’s Maritime Action Plan (read the whole plan below) and Congress’s SHIPS for America Act (read the text of the act below), but says they don’t go far enough. What Bridges really wants is direct public investment (i.e. subsidies) for the shipbuilding industry. She concludes:

But for U.S. strategic interests, a maritime world with more bottlenecks and adversaries creates foundational threats. Being at the mercy of foreign-crewed, foreign-flagged, and foreign-built vessels could threaten everything from access to jet fuel to medical supplies. Private capital won’t fix this. The absence of public commitment is what allowed the gap to open in the first place. Building a baseline of shipbuilding capacity can offset these risks by expanding the nation’s manufacturing resilience and protecting its military and commercial interests.

The shipbuilding industry did not have to die. Policymakers allowed it to collapse because the political consensus trusted the markets to sort everything out. The markets did their sorting, and China won. Reversing the decline will be expensive and time-consuming, but inaction—and the wrong actions—will cost even more.

Seen in that light, the question has less to do with whether the United States can afford to create public shipyards—it’s more about whether it can afford not to.

Read more here.