The Trump administration has basically no answer for why it imposed tariffs on a group of uninhabited islands off the coast of Australia.
In an interview with CNN’s Jake Tapper Sunday, Agriculture Secretary Brooke Rollins insisted that there was something very smart about placing a levy on the penguin-populated Heard and McDonald islands.
“Well, I mean, that, come on, Jake,” Rollins said. “Here’s the bottom line: We live under a tariff regime from other countries.”
“The McDonald islands is not imposing—” Tapper interjected.
“Whatever. Listen, the people that are leading this are serious, intentional, patriotic, the smartest people I’ve ever worked with. I did not come up with the formulas, I’m the ag secretary,” Rollins continued, listing how she had helped farmers acquire soil and fertilizer.
The White House admitted last week that the tariffs were cooked up with bad and arbitrary math. As economists and financial writers attempted to understand the logic behind how Donald Trump’s team had determined the percentage of tariffs imposed by other countries, they discovered something wildly unusual.
The administration calculated the tariffs rate by only looking at goods provided, rather than the combined value of goods and services—something that “most economists seem to think is an odd way to calculate tariffs,” according to BBC Verify’s Shayan Sardarizadeh.
But none of that has swayed Rollins—or, apparently, the president.
“But I have no doubt that I speak on behalf of President Trump that he would say he has the utmost confidence in the team and what they have built and what they have put together,” Rollins said.
“We are unleashing a new golden age, and we will see an economy that will benefit not just every corner of America but our farmers and our ranchers and the people that have been left behind far too long by Republicans and Democrats,” she added.
By Monday morning, the stock market was swinging wildly as investors rushed to understand the potential global impact of Trump’s sweeping tariffs.
The Dow Jones Industrial Average plummeted 756 points—or 2 percent—by 10:30 a.m. That followed a significant dive late last week, in which the market saw back-to-back 1,500-point losses “for the first time ever,” according to CNBC.
American businesses have, thus far, lost $9.6 trillion due to the instability, according to Forbes.
Commerce Secretary Howard Lutnick has argued that some foreign companies were attempting to circumvent levies by shipping through the McDonald and Heard islands before reaching the U.S.
“If you leave anything off the list, the countries that try to basically arbitrage America go through those countries to us,” Lutnick told CBS News on Sunday, calling it a “ridiculous loophole.”
And ridiculous it is—especially since practically a minuscule amount of trade goes through the islands.
“According to export data from the World Bank, the islands have, over the past few years, usually exported a small amount of products to the U.S.,” reported the BBC, noting that “in 2022 the U.S. imported $1.4m from the territory, nearly all of it unnamed ‘machinery and electrical’ products.”
The Heard and McDonald islands tariff was very obviously made in error, at least through the eyes of foreign officials. Australian Trade Minister Don Farrell told the Australian Broadcasting Network that the tariff was “clearly a mistake” and indicated a “rushed process.” Farrell extended a free trade agreement with the European Union last week, stating that “the world has changed” in the wake of Trump’s announcement.
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