Amends provisions of the Merchant Marine Act, 1936 to prohibit certain operating differential subsidy contracts, including contract amendments and permissions, from being made for vessels operated with full, partial, or no operating differential subsidy in an essential service served by U.S. citizens, absent certain determinations of inadequate or competitive existing service.

Amends provisions forbidding operating differential subsidies to foreign trade contractors engaging in coastwise or intercoastal trade without written permission of the Secretary of Transportation to require that applications for such written permission disclose the nature and scope of proposed domestic service. Requires the Secretary to disapprove any application which would likely adversely affect existing exclusively domestic service.