[Congressional Record Volume 171, Number 133 (Friday, August 1, 2025)]
[Extensions of Remarks]
[Page E747]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       INTRODUCTION OF THE MERCHANT MARINE ALLIES PARTNERSHIP ACT

                                 ______
                                 

                              HON. ED CASE

                               of hawaii

                    in the house of representatives

                         Friday, August 1, 2025

  Mr. CASE. Mr. Speaker, 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 mainline 
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 Hawaii 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ancient and outdated restriction has always been argued as national 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 percent 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 out 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 Hawaii. Located 
in the middle of the Indo-Pacific, Hawaii 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 Hawaii, maritime employment in the U.S. 
shipbuilding and repair sector has declined by 15 percent 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, Hawaii 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 percent 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.

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