The two island territories were hit with 10% tariffs on Saturday. They were among 86 countries that met the same fate, yet other countries are facing additional higher tariffs on April 9 in response to their tariffs on U.S. goods. Heard Island and McDonald Islands are largely populated by penguins and uninhabited by people, which has prompted jeering online.
“Why are the Heard Island and McDonald Islands, which don’t export to the United States, and are quite literally inhabited by penguins, why do they face a 10% tariff?” CBS News’s Face the Nation host Margaret Brennan asked Lutnick on Sunday. “Did you use AI to generate this?”
“No,” Lutnick responded laughing. “What happens is if you leave anything off the list, the countries that try to basically arbitrage America go through those countries to us.”
Lutnick cited the 2018 tariffs against China that President Donald Trump imposed at that time. As a result of the tariffs, China used the loophole of other countries, which didn’t have tariffs, to ship their goods to the U.S.
“And so the president knows that. He’s tired of it. And he’s going to fix that. So basically he said, ‘Look, I can’t let any part of the world be a place where China or other countries can ship through them.’ So he ended those loopholes, ridiculous loopholes,” Lutnick explained.
SCOTT BESSENT ‘REJECTS ASSUMPTION’ OF AN IMPENDING RECESSION
Former President Joe Biden largely kept Trump’s tariffs against China in place when he took office. Biden’s last tariff against China was in May 2024 when Biden announced tariffs against $18 billion worth of Chinese goods and effectively raised sales taxes in the U.S. by $3.6 billion.
Lutnick has long defended tariffs against China, as he claims U.S. consumers buy more Chinese goods than Chinese consumers buy U.S. goods.
