Trump Administration Strikes $7.5 Million Deal to Deport Non-Criminals to Palau

Paul Riverbank, 12/27/2025 Palau strikes a pragmatic deal, accepting non-criminal US deportees in exchange for aid. This reflects a broader US strategy: blending immigration enforcement with foreign partnerships, offering small nations much-needed support while advancing American policy objectives.

The arrangement, struck towards the end of December and revealed to the public on Christmas Eve, comes with its own peculiar logic and price tag. For both sides, the numbers add up: $7.5 million changing hands, which works out to around $100,000 for each individual Palau agrees to take in. President Surangel Whipps Jr. was direct about what motivated his government. Palau, he insisted, is grappling with “local labor shortages in needed occupations.” This new group of arrivals is expected to fill those gaps, helping businesses and services long stretched thin.

It’s easy to find echoes of American influence in Palau—English is spoken everywhere, dollars pass from hand to hand, teenagers dream of U.S. colleges. More quietly, U.S. defense agreements guarantee Palauan security, and the island’s mail arrives on familiar postal trucks. The bilateral relationship, in fact, isn’t new. The Biden administration extended almost $900 million in aid last year, earmarked for health clinics, schools, and other public needs, and American engagement in Palauan life can be felt daily.

Yet beneath this history, the new agreement stands apart. The $7.5 million isn’t the sum total. There’s another $6 million going specifically to Palau’s civil service pension fund, and $2 million tagged for improving law enforcement—a package Washington describes as a show of “appreciation” for Palau’s support in enforcing American immigration laws. The sentiment, relayed by the US embassy in Koror, had an unmistakably transactional tone.

But why Palau, and why now? A glance at modern US immigration challenges helps explain. In deportation cases involving nationals from countries such as Russia, Iran, China, or Cuba—states hardly eager to accept the return of their own—Washington has been quietly arranging deals elsewhere. These third-country agreements have become more frequent. Rwanda, for example, once received $100,000 to take in an Iraqi man when Baghdad balked, and Equatorial Guinea and South Sudan have signed on for similar, if smaller, numbers.

Even the cost seems to follow no strict pattern. El Salvador took 238 suspected (though not convicted) gang members for $6 million—roughly $25,000 per head. Rwanda later agreed to take in up to 250 more, for an as-yet undisclosed sum. Each deal reflects a delicate balancing act: the receiving country’s needs, the “status” of the deportees, the broader diplomatic or security context.

In Palau’s case, the calculation is clear-eyed, not sentimental. The nation’s economy wobbles on a precariously narrow base—foreign aid is about 12 percent of GDP, and even the most scenic resorts can’t find enough staff. What for the US is a foreign policy workaround is for Palau a practical lifeline and a chance to bring in workers for jobs few locals fill.

Of course, for most Palauans, this deal will fade into the noise of daily life. Seventy-five people do not crowd a nation, although in a small community, every new face gets noticed. Agreements like this, and others unfolding across the Pacific and Africa, are now quietly embedded in the larger story of America’s ongoing efforts to police its borders when the usual playbook falls short.

Taken together, these arrangements reveal a trend: Washington is marrying aid to enforcement, bargaining for deportation options in resource-starved states. For Palau, the money is a meaningful boost and the new arrivals, they hope, will settle productively into the workforce. For US policymakers, it’s another lever to resolve the thorniest deportation cases.

While the ethics of such deals remain open to debate on both sides of the Pacific, for now, the two countries find themselves woven even more closely together—each, for their own reasons, choosing pragmatism over politics. In the world of small nations and big power interests, sometimes it’s the side agreements and footnotes, not the headlines, that quietly shape the future.

On the surface, Palau could easily be mistaken for just another far-flung tropical backdrop, perhaps most familiar as the setting for a reality TV contest, but there’s plenty unfolding beyond the coconut trees and turquoise waters. The Pacific archipelago—population 18,000—has stepped into the diplomatic spotlight, sealing a deal with the United States that few might have predicted: Palau will accept up to 75 individuals deported from the US, but not criminals. These are people Washington refers to as “third-country nationals”—folks who haven’t been charged with any crime, but for various reasons cannot return to their countries of birth.The arrangement, struck towards the end of December and revealed to the public on Christmas Eve, comes with its own peculiar logic and price tag. For both sides, the numbers add up: $7.5 million changing hands, which works out to around $100,000 for each individual Palau agrees to take in. President Surangel Whipps Jr. was direct about what motivated his government. Palau, he insisted, is grappling with “local labor shortages in needed occupations.” This new group of arrivals is expected to fill those gaps, helping businesses and services long stretched thin.It’s easy to find echoes of American influence in Palau—English is spoken everywhere, dollars pass from hand to hand, teenagers dream of U.S. colleges. More quietly, U.S. defense agreements guarantee Palauan security, and the island’s mail arrives on familiar postal trucks. The bilateral relationship, in fact, isn’t new. The Biden administration extended almost $900 million in aid last year, earmarked for health clinics, schools, and other public needs, and American engagement in Palauan life can be felt daily.Yet beneath this history, the new agreement stands apart. The $7.5 million isn’t the sum total. There’s another $6 million going specifically to Palau’s civil service pension fund, and $2 million tagged for improving law enforcement—a package Washington describes as a show of “appreciation” for Palau’s support in enforcing American immigration laws. The sentiment, relayed by the US embassy in Koror, had an unmistakably transactional tone.But why Palau, and why now? A glance at modern US immigration challenges helps explain. In deportation cases involving nationals from countries such as Russia, Iran, China, or Cuba—states hardly eager to accept the return of their own—Washington has been quietly arranging deals elsewhere. These third-country agreements have become more frequent. Rwanda, for example, once received $100,000 to take in an Iraqi man when Baghdad balked, and Equatorial Guinea and South Sudan have signed on for similar, if smaller, numbers.Even the cost seems to follow no strict pattern. El Salvador took 238 suspected (though not convicted) gang members for $6 million—roughly $25,000 per head. Rwanda later agreed to take in up to 250 more, for an as-yet undisclosed sum. Each deal reflects a delicate balancing act: the receiving country’s needs, the “status” of the deportees, the broader diplomatic or security context.In Palau’s case, the calculation is clear-eyed, not sentimental. The nation’s economy wobbles on a precariously narrow base—foreign aid is about 12 percent of GDP, and even the most scenic resorts can’t find enough staff. What for the US is a foreign policy workaround is for Palau a practical lifeline and a chance to bring in workers for jobs few locals fill.Of course, for most Palauans, this deal will fade into the noise of daily life. Seventy-five people do not crowd a nation, although in a small community, every new face gets noticed. Agreements like this, and others unfolding across the Pacific and Africa, are now quietly embedded in the larger story of America’s ongoing efforts to police its borders when the usual playbook falls short.Taken together, these arrangements reveal a trend: Washington is marrying aid to enforcement, bargaining for deportation options in resource-starved states. For Palau, the money is a meaningful boost and the new arrivals, they hope, will settle productively into the workforce. For US policymakers, it’s another lever to resolve the thorniest deportation cases.While the ethics of such deals remain open to debate on both sides of the Pacific, for now, the two countries find themselves woven even more closely together—each, for their own reasons, choosing pragmatism over politics. In the world of small nations and big power interests, sometimes it’s the side agreements and footnotes, not the headlines, that quietly shape the future.