With U.S. gas prices climbing as the war in Iran continues, the Trump administration’s 60-day waiver of the Jones Act is being cast by the White House as a quick fix. But whether it can meaningfully move the needle remains an open question.

"We need to really be careful that the Jones Act relief is not viewed as a magic bullet to the problems in the Middle East," says Dr. Nick Vyas, executive director of the Kendrick Global Supply Chain Institute at USC's Marshall School of Business.

Originally passed as a way to support domestic trade and boost the nation's shipbuilding following World War I, the Jones Act (officially known as the Merchant Marine Act of 1920) requires all cargo moved between the country's ports to be transported on American-made, crewed and owned vessels. With the functional closure of the Strait of Hormuz choking off global supplies of oil, LNG and fertilizer, the Trump administration has asserted that waiving the Jones Act will allow those vital resources to flow more freely across the country. 

However, the debate over the viability of the Jones Act and its impact on rising gas prices stemming from the Iran conflict are viewed by many as separate issues. The law has faced criticism from the maritime industry for years for the higher transportation costs it creates due to chronic vessel shortages and a lack of U.S. shipbuilding capacity. But while those critiques are widely shared across the shipping sector, a short-term waiver of a domestic shipping restriction is unlikely to address the global resource capacity problems created by the closure of the Strait of Hormuz.

"It is a Band-Aid on a bullet hole," Vyas says.

That's because the core issue at play right now isn't simply how fuel is being moved in the U.S., rather, how much of it is actually available globally in the first place. Although the U.S. is actually a net exporter of petroleum, gas prices in most parts of the country are largely dependent on per barrel costs for the global market, and 20% of the world's oil moves through the Strait of Hormuz. Put simply, waiving the Jones Act makes it easier to move existing supplies on more ships — and could even make gas cheaper by some small margin — but it's likely to do little (if anything) to address the current cause of skyrocketing gas prices.

Read More: For California, Jones Act Waiver More Likely to Alleviate Tanker Capacity Crunch than Gas Prices

If you look at past Jones Act waivers, it's not hard to see that the focus has primarily been on addressing domestic supply constraints, including Hurricane Sandy in 2012, Hurricane Maria in 2017, and a cyberattack against Colonial Pipeline in Texas in 2021. In each case, the goal was to ease short-term bottlenecks in getting fuel where it needed to go, not to offset a disruption to global supply, which is what’s ultimately driving prices higher in the current crisis.

It's also important to understand the exact nature of the relationship between the Jones Act and U.S. gas prices. In practice, it affects how efficiently and cheaply fuel can be distributed within the country, particularly between refining hubs like the Gulf Coast and high-demand areas on the East Coast and in California. And because there are only a few dozen Jones Act-compliant ships in service today, a small handful of operators control the market with little to no competition.

That means that the Jones Act does indeed add to costs at the pump at the margins, since more expensive domestic shipping ultimately gets baked into the final price of refined fuel, especially for harder-to-reach parts of the country such as Hawaii and Alaska. But even eliminating those costs temporarily represents a drop in the bucket compared to the global market swings that we've seen in recent weeks, Vyas notes.

That's not to say that there still shouldn't be a discussion around whether the Jones Act needs to be changed, or potentially done away with altogether. As Cato Institute associate director Colin Grabow asserts, "the real problem is not the waiver — it's the law itself."

"A statute that must be bent, stretched, or ignored whenever it becomes inconvenient is not serving the national interest, but rather undermining it," Grabow said in a March 18 blog post.

For Vyas, his hope is that the latest 60-day waiver can open up a wider conversation around the Jones Act that extends well beyond this current crisis. Although the original intent of the law in 1920 was centered around national security, the needs of the country a century ago simply don't match the current climate. Commercial shipbuilding in the U.S. has all but gone away in the decades since the Jones Act came into effect, and today the country's shipping sector operates within a delicate global economy that in no way resembles the post-World War I landscape of yesteryear.

"Having a 60-day remedial solution may actually create the opening for these conversations to cement some long-term policy decisions," Vyas posits. "It's time for us to look at it, reflect on it, and understand what it truly means when we talk about national security."