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FACT CHECK: How CNN Money Missed the Boat on the Jones Act and Puerto Rico

The Jones Act, also known as the Merchant Marine Act of 1920, is often misunderstood due to unsubstantiated claims that go unchallenged in the media. So, let’s fact check the reference to the Act in this story published by CNN Money on June 12. CNN wrote:

“Statehood would also make a lot of stuff cheaper on the island. Cars, for example, cost about 40 percent more in Puerto Rico than on the U.S. mainland. That’s because of an old rule called the Jones Act that forces goods to go to the mainland first and then be shipped only on a U.S. vessel to Puerto Rico. That’s a lot more expensive than sending something from China directly to the island.”

CNN used an animated short online video to show a foreign ship from Asia bypassing Puerto Rico to come to the U.S. mainland because the Jones Act supposedly prohibited the shipper from discharging cars in Puerto Rico because, “it is illegal to go to more than one U.S. port per visit.” Instead, the video said cars had to be offloaded on the mainland and sent to Puerto Rico on American ships.

This claim is just wrong. There is nothing preventing a foreign ship from dropping off cars – or anything else – in Puerto Rico and then continuing to the U.S. mainland. Merchandise can be imported into and exported from Puerto Rico on foreign ships from anywhere in the world. Recent government data shows that most of the vessels serving Puerto Rico are foreign vessels. Only goods transported between Puerto Rico and the U.S. mainland are subject to the Jones Act.

And, about that outlandish, unsubstantiated blanket statement that cars cost 40 percent more in Puerto Rico than on the mainland because of the Jones Act: this simply isn’t even close to reality. There is naturally a small price differential, because it does cost a car manufacturer something to ship new vehicles from the mainland to Puerto Rico – typically less than $1,000 per vehicle for volume customers. But, shipping in no way adds 40 percent to the cost of a vehicle on the island. Moreover, because cars are not built on the island, a manufacturer would need to pay for ocean shipping to Puerto Rico no matter where the vehicles originated.

The people who choose to ignore the benefits of the Jones Act know that if they keep promoting this false narrative, people will start believing this nonsense. Don’t be fooled. Get the facts. The American Maritime Partnership does a good job dispelling some of the myths associated with the Jones Act and Puerto Rico in particular here.