Step 1: Preheat your oven to 325°F (160°C). Spread the shredded coconut on a baking sheet and toast for 5-8 minutes until golden brown and fragrant. Let it cool completely before using.
Step 2: In a large bowl or stand mixer, cream together the softened butter, powdered sugar, and vanilla extract until light and fluffy, about 3-5 minutes.
Step 3: Sift together the all-purpose flour, cornstarch, and salt in a separate bowl.
Step 4: Gradually add the dry ingredients to the butter mixture on low speed, mixing just until combined. Fold in the cooled toasted coconut by hand.
Step 5: Shape the dough into a disk, wrap in plastic, and refrigerate for at least 30 minutes.
Step 6: Preheat oven to 300°F (150°C). Roll the dough to 1/2 inch thickness on a floured surface. Cut into desired shapes and place on a parchment-lined baking sheet.
Step 7: Prick the tops of the cookies with a fork and bake for 25-30 minutes, or until the edges are just barely beginning to turn golden.
Step 8: Allow the cookies to cool on the baking sheet for 5 minutes before transferring them to a wire rack to cool completely.