A controversial Trump administration deal to relocate deportees from the US to the small Pacific nation of Palau faces an uncertain future, after the senate voted to block the deal as concern about the agreement grows.

The deal, which allows up to 75 third-country migrants facing removal from the US to live and work in Palau, was signed by president Surangel Whipps Jr in December. Palau’s lower house now has to consider the deal, and the final decision rests with Whipps Jr.

The arrangement is part of a broader assistance package to Palau, including $2m for security initiatives and $7.5m tied to the resettlement of the third-country nationals.

But in January, Palau’s senate voted to block the resettlement deal and propose a public referendum on the issue. Palauans would be asked whether their country should accept non-Palauan individuals who have been removed from the US.

The referendum would be non-binding but lawmakers said it would “serve as guidance to the national government in determining whether to accept any individuals” under the US deal.

In a written statement to the Guardian, Whipps Jr said the deal with the US will offer “a lawful, humane solution that respects our people, our laws, and our limited capacity as a small island nation”.

Still, the deal to resettle US deportees to Palau has drawn sharp opposition from the country’s traditional leaders and lawmakers since the Trump administration approached Palau in July 2025.

In letters to the president, the Council of Chiefs – an influential group which brings together Palau’s 16 tribal chiefs – said the country was “not ready, willing, and prepared to venture into this new area of responsibility”. It warned that allowing deportees into Palau risked undermining the country’s social cohesion and cultural values.

“We were taken by surprise when a signed MOU [memorandum of understanding] between our government and the US embassy was brought to our attention very recently,” the Council of Chiefs said in a letter to Whipps Jr in January.

In its bill blocking the US deal, Palau’s senators said the country, which is not a signatory to the 1951 UN Refugee Convention, “is not suited to serve as a country of deportation, relocation or resettlement” because of its “geographic size, infrastructure and resource constraints”.

Whipps Jr said Palau will “review each individual on a case‑by‑case basis and will decide who may come here”.

“We are particularly focused on individuals whose skills and professions can help fill genuine gaps in our workforce and contribute positively to our communities.”

Senator Rukebai Inabo was one of just three lawmakers who supported the US deal. Inabo believes the agreement to accept US deportees should go ahead. She said it was “mutually beneficial” for Palau and the US, while also providing support to the deportees who had few other options.

“If they have not complied with US laws on immigration, what choice do they have?” she said. “Coming to Palau is good for them because it’s a free country, it’s very peaceful here, and life here is simple and not as expensive.”

Inabo said she supported a referendum as a means to gauge public opinion on the issue.

The agreement with Palau is part of the Trump administration’s broader push to remove migrants from the US by transferring them to third countries, including South Sudan and Eswatini – a policy that has been criticised by migration lawyers and human rights groups.