Bilateral relations between Germany and Palau are amicable and characterised by shared values. Diplomatic contacts are maintained through the German Embassy in Manila. Germany has an honorary consul in Palau. Foreign Minister Baerbock visited Palau in July 2022.

Germany supports Palau via its contributions to the EU’s Neighbourhood, Development and International Cooperation Instrument (NDICI) (until 2021: European Development Fund (EDF). Palau also plays a role in Germany’s close cooperation on climate change with the countries in the South Pacific, a. o. within the framework of regional programmes run by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and the International Climate Initiative (ICI) of the Federal Government.

Palau is a member of the Group of Friends on Climate and Security in the United Nations founded by Germany and Nauru.

According to Federal Statistical Office figures for 2023, Germany exported goods worth approximately 73,000 euro from Palau and there were no imports.

Apart from some architectural vestiges of phosphate plants on Angaur Island, the name of a waterway (German Channel) and other names hardly any traces of the period of German colonial administration between 1899 and 1914 in Palau are left. In October 2005, Palau National Museum opened a small German department.

The “Krämer volumes” from the German South Seas Expedition (1907–1910) undertaken by the German ethnographer Augustin Krämer (1864–1941) and Anneliese Eilers (1900-1953) remain relevant. The records contained in the seven volumes are still recognised today by Palau’s courts as the only authentic source in tribal disputes or conflicts over property. In the absence of written records, the “Krämer volumes” constitute the codified memory of Palau’s culture and identity, which are under threat from the modern way of life. The Federal Foreign Office funded the translation of the records from German into English. A team of the German Archaeological Institute in cooperation with the Kiel University investigated the monumental earthworks in Palau from 2019-2022.