Why did Trump impose a tariff on uninhabited Penguin islands? Commerce secretary explains

US President Donald Trump, while announcing his sweeping tariffs, had slapped 10% tariffs on the uninhabited Australian external territory of Heard Island and McDonald Islands. This triggered a meme fest on the internet, depicting how Penguins, the sole inhabitants of the Heard and McDonald islands, arguing with Trump over tariffs.

However, US Commerce Secretary Howard Lutnick has now explained the reason behind Trump's unusual move. To a question on why the Heard and McDonald Islands, which don’t export to the United States and are inhabited by penguins, faced a 10% tariff, Lutnick explained the idea was to ensure that there were no countries left off. "If you leave anything off the list, the countries that try to basically arbitrage America go through those countries to us," Lutnick added. He added that Trump "knew that" and was "tired of it".

"These ridiculous loopholes. And now what he’s trying to say is, I’m going to fix the trade deficit of the United States of America. It’s a national security issue," Lutnick told CBS News.

It has been reported that the US has had shipments mislabelled as coming from Heard and McDonald Islands, instead of their real countries of origin. The goods that came this way included shipments of aquarium systems, Timberland boots, wine and parts for a recycling plant, according to The Guardian. All this when neither the company address nor the port of departure for the shipment, nor the destination port were located in those territories.

Trump's decision to include Heard and McDonald Island had perplexed the Australian government, which said the move hinted that "nowhere was safe" from Trump's tariffs. 

The Trump administration had also included Norfolk, another Australian island which is 1,600km north-east of Sydney and has a population of 2,188, on the list. It was slapped with a 29% tariff though it has no export relationship with the US. 

According to US government data, Norfolk Island exported US$655,000 (A$1.04m) worth of goods to the US in 2023, with its main export being US$413,000 (A$658,000) worth of leather footwear. This is believed to be a confusion arising due to the mislabelling of products originally from Norfolk, UK, or Norfolk, Virginia in the US.

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