Tiny Pacific Island Strikes Lucrative Deal to House U.S. Deportees

Photo “Palau” by jeff~ via Flickr under a CC BY-SA 2.0 license

The small Pacific Island nation of Palau struck a $7.5 million deal with President Donald Trump’s administration in exchange for taking in up to 75 deportees from the U.S.

A “memo of understanding” was signed on Wednesday following a call between Palau President Surangel S. Whipps, Jr. and U.S. Deputy Secretary of State Christopher Landau to discuss the details of the agreement and “the challenges both nations face and how they are working together,” according to a statement from Whipps’s office.

“The discussion included several new initiatives that help both our nations move forward,” the statement said. “Palau welcomed U.S. commitments that deepen a long standing partnership and deliver concrete benefits for Palauan people in health care, security, pensions, disaster resilience, and labor. Together, Palau and the United States also reaffirmed a shared commitment to a free and open Indo-Pacific that protects both nations’ prosperity and security.”

This statement affirms that “75 third country nationals, who have never been charged with a crime” can live and work in Palau, which has an estimated population of 17,700, to help address local labor shortages. A $7.5 million grant from the U.S. in exchange will allow Palau to meet “related public service and infrastructure needs, while both countries continue close cooperation on immigration and security matters.”

The island nation’s new role in accepting third country nationals comes amid a large push by the Trump administration to crack down on illegal immigration and increase deportation numbers.

Palau has been independent since 1994 but maintains close links with the U.S. through the Compacts of Free Association, which grants Palau U.S. funding and allows Palau citizens to live, work, and join the U.S. military in exchange for U.S. defense rights and access in the Pacific. The agreement was renewed in 2024 under former President Joe Biden’s administration.

According to a statement form the U.S. Embassy of Koror, Palau’s most populous state, Wednesday’s agreement deepens the “bonds of trust and friendship” between Palau and the U.S.

“Through this partnership, the United States and Palau are taking concrete steps to strengthen our security and protect our communities, while also fostering a safe, more secure, and more prosperous Indo-Pacific region,” the statement reads. “Both countries reaffirm their shared commitment to addressing immigration and security challenges and to further deepening bonds of trust and friendship. Continued collaboration between the United States and Palau stands as a symbol of the progress that can be achieved when we work together.”