Step 1: Preheat oven to 350°F (175°C). Line a baking sheet with parchment paper.
Step 2: In a large mixing bowl, cream softened butter and granulated sugar until light and fluffy.
Step 3: Gradually add flour, baking powder, and salt to the butter mixture; mix until just combined. Pour in milk and vanilla extract and mix until a cohesive dough ball forms. Do not overmix.
Step 4: Lightly dust a counter or clean surface with flour. Roll out the cookie dough to about 1/4-inch thickness.
Step 5: Use a 2-inch round cookie cutter to cut out circles. Use a smaller round cutter (like a mini donut cutter or bottle cap) to create the center holes, forming rings.
Step 6: Carefully place cookie rings on the prepared baking sheet. Bake for 10–12 minutes, or until lightly golden around the edges. Let them cool completely on a wire rack.
Step 7: While cookies cool, spread shredded sweetened coconut evenly on another baking sheet. Toast in the oven (still at 350°F) for 5–7 minutes, stirring halfway through, until golden brown. Watch closely to prevent burning.
Step 8: In a saucepan, combine chewy caramels, heavy cream, and salt. Place over low heat and stir continuously until completely melted, smooth, and glossy.
Step 9: Remove caramel from heat and gently fold in the toasted coconut. Mix until every strand is coated.
Step 10: Take each cooled cookie ring and spread the warm caramel-coconut mixture on top, pressing gently to adhere.
Step 11: Melt semi-sweet chocolate chips (in the microwave in 30-second intervals, stirring, or using a double boiler).
Step 12: Dip the bottom of each caramel-coconut-coated cookie into the melted chocolate. Then, drizzle more melted chocolate over the top to create signature stripes.
Step 13: Place finished cookies back on parchment paper and refrigerate for 10–15 minutes to set the chocolate. Serve immediately or store as directed.