Trump tariffs extend to penguin-inhabited islands to block trade loopholes: US Commerce Secretary

US Commerce Secretary Howard Lutnick has defended the Trump administration’s decision to include remote, uninhabited territories – such as the Heard and McDonald Islands – in its latest round of tariffs, explaining that the move aims to prevent other nations from exploiting gaps in the system.

Speaking on CBS News’ Face The Nation on April 6, Mr Lutnick was asked why such territories, which have no export activity to the US and are home only to penguins, were included in the

tariff list unveiled by US President Donald Trump on April 2.

“Why do they face a 10 per cent tariff? Did you use AI to generate this?” host Margaret Brennan asked, referencing the viral speculation and memes that followed the announcement.

“No. No,” Mr Lutnick responded. “The idea is that there are no countries left off.”

He explained that leaving even seemingly irrelevant regions off the list could open the door for trade arbitrage, where goods from countries facing tariffs are rerouted through exempt territories to avoid penalties.

“If you leave anything off the list, the countries that try to basically arbitrage America go through those to us,” he said.

Mr Lutnick pointed to China’s response after tariffs were first imposed in 2018 as an example, saying that exporters “billed through other countries to America” in order to sidestep the restrictions.

“That’s the pattern. And so the President knows that, he is tired of it, and he is going to fix that,” Mr Lutnick said.

He added that the broader goal is to protect US industries and reduce the country’s trade deficit, which the administration considers a national security issue.

“We need to make medicine. We need to make semiconductors. We need to make ships. We need to have steel and aluminium,” Mr Lutnick said. “We need the greatness of America to actually be built in America.”

Despite the

online ridicule and confusion sparked by the inclusion

of penguin-inhabited islands, which are administered by Australia, Mr Lutnick insisted the strategy was intentional and comprehensive – designed to shut every possible backdoor in global trade involving the US.