When you view Mother Earth from outer space, you see a nation with deep water on all four coasts — the Atlantic and Pacific Oceans, Gulf of Mexico and Great Lakes with a latticework of navigable rivers that connect the interior to deepwater ports and the rest of the globe. That nation is the geographic envy of all other maritime nations and that nation is our United States.
As the former commandant of the Coast Guard, one of my many responsibilities was to facilitate and safeguard commerce in the maritime domain that contributes over $4.6 trillion to our gross domestic product while providing gainful employment for more than 23 million seagoing mariners, shipyard employees, tug and barge and salvage and dredge operators, longshoremen, and truck and rail operators, which is not an all-inclusive list.
And beyond the revenue generated by maritime commerce, these very same entities are subjected to a corporate tax structure for intrastate commerce, whereas foreign flag states to include the burgeoning fleet of ships that sail under “flag states of convenience” are exempt from these corporate taxes while dispensing pennies on the dollar to foreign crew members compared to our security screened and Coast Guard credentialed U.S. mariners. Furthermore, construction and maintenance of foreign-flagged ships, particularly in the case of China, are subsidized by the flag state.
In a non-maritime context, let’s say you own a restaurant in Waikiki. A restaurant opens next to yours that pays no rent, no property and unemployment insurance, no utilities, no sales taxes, no food, safety and health inspections, and wages far below that of the minimum wage while presenting a menu identical to your restaurant. If you apply this same logic from those who wish to repeal the Jones Act, our food and service industry would be completely outsourced. Same with rail, trucking and manufacturing and pretty much everything else that we call “made in the U.S.A.”
Similarly, by removing the protections afforded by the Jones Act where foreign states have an unfair competitive advantage, our shipyards would be outsourced along with the technical expertise to design, build and deliver the ships to reconstitute our fleet of seagoing and riverine vessels; our mariners would be displaced by foreign nationals who pose a threat to national security; and dredging and salvage operations in our militarily and economically strategic ports would be placed in the trust of a potential foreign adversary.
The events in Ukraine have reset the world order girded by the United States for more than seven decades with great power tensions among our nation, Russia and China heading into uncharted waters. This is not the time to cede our maritime interests to a foreign nation and potential adversary that would then have leverage over all aspects of our maritime commerce to include our militarily strategic sealift.
For the near term, the benchmark price for Brent crude oil stands at over $120 per barrel, a more than 70% increase in the past year that is mutually exclusive of the Jones Act. Yes, fuel prices are on the way up, and not just at the local level but on a global scale where the U.S. enjoys somewhat of a buffer with our domestic oil and gas production while imports from Russian stocks stand at about 7% and should rightfully go to zero.
This is not the time to be penny wise and pound foolish! The world as we have known it has changed! And just think, the Second Amendment was passed 230 years ago to enable citizens to bear arms and states to raise a militia that has long since been supplanted by our National Guard. I do not suggest or condone a repeal of the Second Amendment, but stand my ground to advocate for the merits of the Jones Act that was passed 129 years later while pundits declare its “obsolescence” and “unfair competitive advantage” in their battle cry for a repeal.
Adm. Paul Zukunft, now retired, was the 25th commandant of the U.S. Coast Guard from May 2014 through June 2018, leading America’s oldest continuous seagoing service and the largest component of the Department of Homeland Security.