Speeches & Testimony

I rise today to join my colleague Congressman Jim Moylan of Guam, in highlighting the urgent need to modernize U.S. maritime policy through our Merchant Marine Allies Partnership Act, which we have introduced to realign federal incentives in our domestic shipping industry away from adversaries, such as the People’s Republic of China (PRC), and toward our trusted allies with proven maritime capacity, such as Japan and South Korea.
 
Our measure directly responds to the real-world consequences of gaping loopholes in the Merchant Marine Act of 1920, better known as the Jones Act, which restricts domestic shipping including routes between the U.S. West Coast and Hawai‘i to vessels that are U.S.-built, U.S.-flagged, U.S.-owned and U.S.-crewed. The rationale for this ancient and outdated restriction has always been argued as national security, to maintain a strong U.S. shipbuilding industry and merchant fleet capable of supporting the military in times of conflict.
 
But today that argument, if it has any merit at all, is being dangerously undermined, and not by our adversaries, but by the very companies benefiting from the monopolistic protections of the Jones Act.
 
Specifically, Jones Act loopholes allow for supposedly minor parts fabrication and supposedly minor repairs to be conducted in foreign shipyards using foreign workers with no condition or restriction as to country. But these are not minor parts but whole sections, and not minor repairs but full retrofits. And the preferred source of this fabrication and these repairs in the People’s Republic of China (PRC).

Jones Act vessels such as the Daniel K. Inouye, Kaimana Hila and Manukai have undergone major structural conversions, including liquefied natural gas (LNG) engine retrofits, at PRC-based shipyards like COSCO’s Nantong facility, which has known ties to the Chinese government and military-industrial complex. These modifications are frequently reclassified as mere “major modifications” to avoid triggering the 50% U.S. import duty intended to disincentivize foreign work. But AIS data, company filings, U.S. Coast Guard correspondence and even photographs confirm that these are anything but routine.
 
This poses a significant and immediate national security concern. First, by enabling vessels critical to U.S. domestic supply chains to undergo major upgrades in foreign-controlled shipyards of adversaries, we introduce unnecessary strategic risk. These ships support domestic commerce, but they also arguably constitute the backbone of sealift capacity that would be required during any military mobilization. Second, the continued outsourcing of vessel modification and construction undermines the U.S. shipbuilding and repair base, leaving us with fewer than 100 Jones Act–compliant vessels in active service nationwide, many of which are aging or specialized. And third, it sends U.S. dollars, jobs and technological investments directly into the hands of a strategic competitor identified by our National Defense Strategy as the most significant long-term challenge to U.S. interests.
 
Nowhere are the consequences of this policy failure more acute or more strategically dangerous than in my home state of Hawai‘i. Located in the middle of the Indo-Pacific, Hawai‘i is not just a remote island economy dependent on maritime commerce. It is the linchpin of U.S. power projection and force posture across the Indo-Pacific. Any disruption to Hawaii’s shipping system is not only an economic risk to our residents but a direct vulnerability in America’s strategic readiness. 

Moreover, while Jones Act supporters continue to claim the law protects U.S. jobs, the evidence says otherwise. According to the Grassroot Institute of Hawai‘i, maritime employment in the U.S. shipbuilding and repair sector has declined by 15% over the past 23 years. This steady erosion is not due to foreign competition alone, but to deliberate business decisions by Jones Act carriers who choose to take advantage of legal loopholes that let them outsource high-value work overseas while still reaping the benefits of domestic protectionism.

Despite these clear defects in the law, Hawai‘i and other islands and noncontiguous parts of our country remain a fully captive market, with no viable alternatives to a Jones Act duopoly that prioritizes profit over preparedness. We see no meaningful return on this federal maritime policy. The economic burden of this broken system, including inflated shipping costs driven by duopoly protections and foreign outsourcing, is borne daily by Hawaii’s families and businesses. We have previously introduced three separate measures to address these specific consequences.

The overall answer for our country to this national security risk is not to force any and all fabrication, repair and operation exclusively into our country since that just compounds a problem we can’t effectively fix. It is instead to cease rewarding our adversaries and start incentivizing our international friends and allies to assist us with our domestic merchant marine and related defense sealift needs. 
 
Our Merchant Marine Allies Partnership Act addresses these problems through a targeted, security-conscious realignment of incentives. Specifically, the bill exempts the current 50% import duty on major vessel modifications only if the work is performed in shipyards located in allied or partner countries, such as Japan and South Korea – nations with world-class maritime industries and deep national security alignment with the United States. It allows ships constructed in those allied countries to qualify for the U.S. domestic (coastwise) trade under a limited Jones Act exemption, thereby expanding access to modern, secure and cost-effective vessels without subsidizing adversarial economies. Finally, the legislation establishes a regulated pathway for foreign-built, foreign-crewed vessels operated by companies from allied nations to participate in the U.S. coastwise trade under clearly defined national security safeguards.
 
This legislation does not repeal or abandon the Jones Act. It restores the law to its intended purpose – to serve as a foundation for national resilience, industrial strength and strategic security, rather than being hijacked by the hypocritical umbrella of national defense at the expense of increased costs of consumer goods across the country. It recognizes that modern maritime commerce is global, but that global alignment must be rooted in trust, shared values and common defense. By partnering with our allies and closing loopholes that empower our adversaries, this bill protects the U.S. supply chain, reduces security vulnerabilities and ensures that the Jones Act serves our people, our economy, and our military, not just corporate bottom lines.
 
Mr. Speaker, we cannot afford to continue defending a system that fails to defend us. The Merchant Marine Allies Partnership Act is a bipartisan, commonsense step toward maritime policy that reflects 21st-century challenges and opportunities. I urge my colleagues to support this legislation and update our maritime policy to modern world reality.

Thank you.