US defends tariffs on remote island of penguins and seals

The US Commerce Secretary has defended the country’s decision to impose tariffs on a group of uninhabited islands, which are populated only by penguins and seals.

The imposition of tariffs on the Heard and McDonald islands were meant to close “ridiculous loopholes” and would prevent other countries from shipping through the islands to reach the US, Howard Lutnick told the BBC’s US partner CBS.

Authorities in Australia reacted with surprise last week when they found out about the tariffs on the island, which sits 4,000km (2,485 mi) from Australia.

Its trade minister Don Farrell told news outlet ABC that the imposition of tariffs was “clearly a mistake” indicating a “rushed process”.

But when asked about the inclusion of the Australian territory on Trump’s tariffs list, Lutnick said: “If you leave anything off the list, the countries that try to basically arbitrage America go through those countries to us.”

“The President knows that, he’s tired of it, and he’s going to fix that.”

Lutnick’s interview was one of several given by US government officials to defend the president’s new tariffs after all three major stock indexes in the US plunged more than 5% on Friday, in the worst week for the US stock market since 2020.

Shipping products through one port to another in a process known as transshipment is common in global trade. But Pew Charitable Trusts, a public policy organisation, says this method can also “enable bad actors to obscure or manipulate data” around the shipping events.

The NGO estimates that hundreds of millions of dollars of tuna and similar species are illegally moved via this method in the western and central Pacific each year.

It’s difficult to get a clear picture on the imports from the Heard and McDonald islands to the US.

According to export data from the World Bank, the islands have, over the past few years, usually exported a small amount of products to the US.

But in 2022 the US imported US$1.4m (A$2.23m; £1.08m) ) from the territory, nearly all of it unnamed “machinery and electrical” products.

Also included on Trump’s list was the British Indian Ocean territory, which is solely occupied by military personnel and requires a permit to visit. World Bank export data shows the territory exported US$414,350 to the US in 2022. – BBC