Two tiny, remote Antarctic outposts populated by penguins and seals have been targeted by Trump’s new tariffs. Heard and McDonald Islands near Australia are only accessible via a 7-day boat trip from Perth and haven't been visited by humans in a decade. https://t.co/eNmIlomaWA
— Soutik Biswas (@soutikBBC) April 4, 2025
The US Commerce Secretary has defended the country’s decision to impose tariffs on the Heard and McDonald Islands, a group of uninhabited islands populated only by penguins and seals. The Secretary stated that these tariffs were intended to close “ridiculous loopholes” and prevent other countries from shipping through the islands to reach the US. Authorities in Australia expressed surprise last week when they discovered the tariffs on the islands, which are located 4,000km (2,485 miles) from Australia.
Australia’s Trade Minister, Don Farrell, described the imposition of tariffs as “clearly a mistake,” indicating a “rushed process.”
Trade flows are measured with error: https://t.co/TWg8RbP9l5
The Guardian found the errant bills of lading that explain US import tariffs "imposed on tiny Australian territories that are either uninhabited or claim to have no trading relationship with the US". pic.twitter.com/TXi8hR8IsT
— Trade Diversion (Jonathan Dingel) (@TradeDiversion) April 4, 2025
If only there were a proven way for the USA to reduce foreign trade barriers without destroying so much commerce, wealth, and international goodwill oh well guess we have to do these insane "reciprocal" tariffs pic.twitter.com/DpguAx4fZN
— Scott Lincicome (@scottlincicome) April 6, 2025
However, US Commerce Secretary Howard Lutnick explained that including such territories was essential to prevent other countries from bypassing the tariffs. “If you leave anything off the list, the countries that try to basically arbitrage America go through those countries to us,” Lutnick told CBS. “The President knows that, he’s tired of it, and he’s going to fix that.”
"The US accounts for less than 15% of world trade and that share {is} shrinking. The rest of the 85% of trade is not directly affected by Trump’s tariffs or retaliation."
https://t.co/EsnoEFiLcT pic.twitter.com/VhEII4aKiq
— Scott Lincicome (@scottlincicome) April 4, 2025
Lutnick’s interview was among several given by US government officials to defend the new tariffs after significant declines were observed in major US stock indexes last Friday.
Tariffs on remote territories
Transshipment, the process of shipping products through one port to another, is a common global trade practice. However, according to Pew Charitable Trusts, this method can allow “bad actors to obscure or manipulate data” around shipping events.
The NGO estimates that it is difficult to get a clear picture of imports from the Heard and McDonald Islands to the US. Export data from the World Bank shows the islands have usually exported small amounts of products to the US, nearly all of it categorized as “machinery and electrical” products. Also included on the tariff list was the British Indian Ocean Territory, which is solely occupied by military personnel and requires a permit to visit.
Australia’s Prime Minister has described the decision by the US as “unwarranted” and “not the act of a friend,” expressing clear displeasure over the issue. This imposition comes amidst heightened concerns over transshipment and the broader impacts on international trade dynamics.
