Higher Ed is an Area of Trade Surplus
But the Trump administration is out to wreck it.
It has become increasingly obvious that in all this talk about trade deficits that the Trump administration appears focused on goods and is ignoring services. So, yes, for example, the US buys TVs from the rest of the world, but the rest of the world buys Netflix from us.
But one area of trade that the administration seems hellbent on destroying is that for higher education.
Note these numbers from a Marketplace piece from last November.
International students contributed a new record amount to the U.S. economy, almost $44 billion during the last academic year, according to data published by NAFSA: Association of International Educators. They figure the country’s 1.1 million international students are key to some 378,000 jobs. That’s through housing costs, tuition and fees, according to NAFSA CEO Fanta Aw.
“It’s not only just the faculty, and it’s not just the staff, it’s even the sort of the vendors that are part of university, in many ways, are being supported through that,” she said.
Roughly half of international students are from China or India — and many are grad students or recent graduates permitted to work on a student visa for a time after graduation.
Those 1.1 million students don’t just spend money on their education, I would note. They spend widely in the broader economy like everyone else does.
In regard to trade (source):
The trade surplus from higher education accounts for nearly 14% of total U.S. services trade surplus—comparable to the combined exports of soybeans, coal, and natural gas.
As the administration puts a 125% tariff on goods from China (even as he pauses broader tariffs), what do you think the Chinese government’s response is going to be to sending so many of its students to the US?
Throw in the increasing number of students being detained and deported, and schools (and therefore the broader economy) will feel a hit.
For example, via CBS News: UF student deported to Colombia after ICE detention sparks campus protest.
A University of Florida student detained by Immigration and Customs Enforcement (ICE) near campus has returned to Colombia, following his arrest last month by Gainesville police for an expired vehicle registration, officials said.
Felipe Zapata-Velásquez, 27, was taken into custody on March 28 and later voluntarily deported, according to ICE.
[…]
Body camera footage obtained by CBS News Miami shows Gainesville police pulling Zapata-Velásquez over on March 28 for an expired registration, last renewed in 2023.
“You have your driver’s license with you?” an officer asks.
Zapata-Velásquez provides a Colombian ID and confirms he’s an international student at UF. Officers then inform him his license is suspended and order him out of the car.
ICE officials said Zapata-Velásquez held an F-1 student visa, terminated last year.
In the video, he tells police he transferred from Santa Fe College to UF and was updating his information. He was handcuffed, taken into custody and transferred to the Krome Detention Center in Miami-Dade County.
On the one hand, visas get tricky, and transferring schools without following proper procedure can get an international student into trouble, including revocation of a visa. I am only passingly familiar with all the relevant rules, and there isn’t enough in the piece to intelligently comment.
I will say that none of this would lead parents in Colombia who read this story to feel good about sending their child to the US.
His mother, Claudia Velásquez , expressed distress after his arrest. “We’re not sleeping. Eating is like torture because we don’t know if he’s eating. We don’t know where he is. There’s no communication,” she told CBS News Miami in Spanish.
And note, this is just a story I happened to notice this morning. I did not go looking for an example.
It is striking (but, as always, not surprising) the degree to which the complex nature of the global economy is being ignored by the “policy-makers” in the US government to the ultimate detriment of the United States.
Post graduate students in STEM fields often choose particular professors for their doctoral degree, usually based on the kind of research, and funding, they are involved with. Mix the hostility towards foreign students with the withdrawal of research funding, and a lot of the next generation of PhD candidates will be looking more towards Europe to do that work.
I understand a win-lose proposition. I can’t comprehend a lose-lose one.
@Kathy: The attacks on grants are a huge part of this story.
@Kathy:
@Steven L. Taylor:
Remember, assume the goal is Donald the First. Look globally at authoritarian regimes, and how movements against them almost always start at the universities. Breaking the US university system would be an early goal for a would-be emperor. I admit that my assumption is paranoid, but it matches the facts on the ground.
Without repeating my post from today’s forum, international students, especially Chinese students including many wealthy Chinese students, are a fundamental building block of our local university-centric economy. There are literally huge apartment buildings that cater to this segment of students, not to mention car dealers and high end furniture retailers. If those students or their parents or their government decide we are not a safe bet, it will be a significant economic contraction on top of the de-funding of USAID work and research funding.
I can imagine them considering themselves to be Alexander the Great, cutting the Gordian Knot.
Of course, Alex was an autocratic monomaniac, hellbent on fighting wars, and not much else. But he had the “warrior spirit” I guess.
This, while the country as a whole faces the prospect of Fewer college students and ultimately fewer graduates (NPR):
The article is from early January, but just the prospect of a trump administration had quite an impact:
So grants and other federal funds are being cut and college enrollments will decrease even more…is there anything the orange one can’t f up? I guess the states will need to raise taxes and/or say goodbye to some colleges.
For many years I warned my Australian university employer (unsuccessfully) that its increasing reliance on international (mainly Chinese) students would sooner or later end in tears because of political considerations. As it happened the pandemic brought about the crisis before the Chinese government had cause to ban students from coming. The problems that are about to confront American universities were predictable and predicted.
@Ken_L:
Absolutely!
But Trump is turning the dials up to make it worse.
@Steven L. Taylor: When has Trump ever not turned up the dial to make things worse?
“The problems that are about to confront American universities were predictable and predicted.”
Kartik Gada (formerly of the Futurist) has spoken on You Tube about the technical disruption higher education faced even before Trump. It includes how: (i) the ability to teach via streaming video services (or more advanced means) could someday allow the most effective professors to teach in multiple forums, thereby rendering a lot of employment redundancies at individual schools to be eliminated (i.e., teachers being fired), thereby providing a cost savings (in theory) to students; and (ii) financial stress in our lives will force schools to explain how, in a cost-benefit analysis to prospective student, the benefits of a higher education will exceed the ever-increasing cost of obtaining a degree.
https://youtu.be/yS9gE8t6PX8?si=0WC0KGDmC4Zi40Ef
As horrible as all of Trump’s “policies” have been for America and Americans, I am starting to think that the biggest, least-reversible long-term damage will be done by wrenching the US out of the science business. US federally-funded research (in academia, federal labs, and subsidized corporate research) has been the driver of US economic dominance since WW2. Even Silicon Valley depended far more than is generally acknowledged on a foundation of federally-funded basic research. And now Trump is throwing all of that away, because it is not worth anything to him, personally, today. Offshoring our brains will be even harder to reverse than offshoring our industry.