Escaping tariffs, Palau says strong US good for Pacific

The president of Palau, one of the few countries to escape US tariffs, says he remains "positive" the Trump administration will keep a strong focus on the Pacific region.

Palau, a nation with a population of 17,000, has a compact of free association with the United States providing economic assistance in return for allowing the US military access to its territory. It received USAID funding for submarine cables and climate change programs, before most US Agency for International Development staff globally were put on leave.

"I hope that it is a retreat, reassess, then come back stronger," Palau President Surangel Whipps Jr said of the USAID cuts.

Citing the Reagan administration slogan of "peace through strength" that he said "Trump likes too", Whipps Jr told the Lowy Institute that Palau's priority is to ensure it is properly defended.

In his first presidency, Trump brought three Pacific Islands leaders to the White House to engage on security issues, he said.

"What Palau sees as important is a strong United States that's able to continue to be strong, is good for Palau and good for the planet," Whipps Jr said.

"It has been a bumpy road, cutting USAID and other activities, but I like to think positive," he added.

Although two other Pacific compact states, Marshall Islands and the Federated States of Micronesia, were made subject to tariffs, Whipps Jr said Palau fell under the radar because it had few exports.