The US Commerce Secretary has defended the US decision to impose tariffs on the Heard and McDonald Islands – uninhabited islands in the southern Indian Ocean, populated only by penguins and seals. Howard Lutnick, speaking on CBS, said the tariffs are intended to close loopholes in the global trading system and prevent the islands from being used as transit points by countries trying to avoid US tariffs through what he called “trade arbitrage.”
Australian authorities expressed surprise when they learned of the inclusion of these islands, which are located about 4,000 km from Australia, in the US tariff list. Australian Trade Minister Don Farrell called the decision “clearly a mistake” that shows a rushed process, writes A2 CNN. However, Lutnick defended the decision, stressing that any exemption from the list could be used by countries to circumvent tariffs. “The president is tired of this and he will fix it,” he said.
The imposition of tariffs came at a time when US financial markets experienced a sharp decline – major indexes suffered a drop of over 5%, the biggest since 2020.
Other remote territories such as the British Indian Ocean Territory were also included in the new tariff list, despite being inhabited only by military personnel.
Trade data from the World Bank shows that in 2022, the US imported $1.4 million in goods – mainly “machinery and electrical products” – from Heard and McDonald Islands. (A2 Televizion)
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