Will Trump’s “America First” Policies Disrupt International Education?

January 24, 2017 — Leave a comment

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In 2016, the United States hosted over 1 million foreign students at an estimated $32.8 billion economic impact and over 400,000 jobs, a level that could easily exceed $45 billion by 2025. Under the outgoing Obama Administration, international student enrollments grew five-fold from 200,460 international students in 2009 and left the US as the top destination for international study.  Moreover, education was a key policy platform.  Obama’s 100,000 Strong in the Americas initiative encouraged US
students to study in Latin America and his 1 Million Strong initiative was designed to expand Mandarin Chinese language study as much as five-fold by 2020.  Even Michelle Obama’s Letting Girls Learn initiative became a touchstone for finding long-term solutions for gender participation in economic growth, particularly in the more unstable regions of South Asia, the Middle East and in African countries such as Nigeria.

President Trump’s America First policy begins with a more divisive rhetorical message to the rest of the world. But it is the potential policy changes–in trade, economics, immigration, security, and targeting countries such as China–that may directly impact international study in the US and the projection of American higher education leadership abroad.  This much is known: shortly after President Trump’s inauguration, the White House posted some of its key policy priorities including an America First Foreign Policy, broad commitments to pursuing or renegotiating “trade deals that work for all Americans” and issues related to curbing illegal immigration. How might Trump’s policies impact international education and US higher education?

I’m watching four specific areas that can have a material impact on international education activities.

Immigration and Visa Issues

Former New York Mayor Michael Bloomberg once suggested stapling a green card to every foreign student’s college diploma.  Good luck with that under a Trump Administration.  In fact, if more xenophobic tendencies become policy it will more difficult for foreign students study in the US, find work-study internships or so-called Optional Practical Training (OPT) in the STEM fields, and to find employment after graduation.  In practical terms, approval of F1 and M1 visas for students in full time and vocational study are under the management of the Department of Homeland Security. There are a number of circumstances under which the department could take a harder line on certain regions such as South Asia, Middle Eastern countries such as Saudi Arabia (the leading source country for students studying English in the US) and students from Mexico.

Equally important, there is the impact on student decision-making psychology and whether they feel welcome in the country. Past history has shown that even the perception of anti-foreign attitudes–and possible incidents related to such a tense environment–can impact enrollments, sometimes seriously.  We saw this happen during the anti-Indian measures and violence in Australia in 2009 and, more recently, a clear trend of weakening UK enrollments following imposed limits on foreign visas and work-study programs. This last effect has been to stifle growth in the one of the world’s most popular study destinations, a trend that may be reinforced in the wake of Brexit preparations.

China.

The new administration’s trade czar, Peter Navarro, has well-known hardline views on China. His documentary, Death by China (which has a lead endorsement by then-businessman Donald J. Trump) focuses squarely on China as the villain of America’s manufacturing decline. His 2006 book, The Coming China Wars, was among the first to take aim at China’s rapid industrialization and the potential negative impact it has on the US and the world.  At the very minimum, we should expect a more confrontational Sino-US trade relationship.

How might trade friction and retaliatory policies might impact education dealing with China?  First, if even a portion of Chinese students vote with their feet and go elsewhere there will be a magnified impact. China accounted for over 378,000 students in the US in 2016, equivalent to one-third of all international student enrollments.  While it is doubtful that a Trump Administration will tamper with Chinese student visas, the more likely scenario could be a psychological change in the event Chinese students begin to feel less comfortable.

A second impact could potentially be on US educational institutions operating in or hoping to enter China.  US universities operate hundreds of academic programs, research centers and a number of high profile branch campuses in China, from NYU Shanghai to Duke, with many more in line for approval by China’s Ministry of Education.  China could retaliate by not approving US academic programs pending at the MOE, increasing the regulatory scrutiny or even shuttering existing programs. In fact, any increased bilateral tension would come in the context of Chinese President Xi Jinping’s recent moves to limit Western education and thought and give a pretext to such moves, thus increasingly the probability.

Expansionary Fiscal Policy and the US Dollar viz. EM Currencies

Trump is targeting a $1 trillion infrastructure spending plan with an ambitious goal of creating 25 million new jobs.  To what extent this stimulus will be cut down by deficit hawks in Congress is unclear, but at least directionally it points to a relatively higher inflationary environment, rising interest rates and a stronger dollar.  As I have written previously, the strength of the US dollar adversely impacts international student enrollments from emerging markets, the leading source for internationally mobile students. In the latest round beginning roughly in 2014, countries such as Mexico, Malaysia, Nigeria, and South Africa have been hit hardest while India and China only moderately. A further strengthening of the dollar by 15-20%  against selected currencies could have a wider and deeper impact on students and their family budgets precisely at a time when university admissions officers in the US are attempting to diversify enrollments away from China and into new markets.

Renegotiating Trade  

TPP is dead. America will now shift toward bilateral trade negotiations.  In my view, China’s trade relationship could hark back to the volatile and persistent Most Favored Nation (MFN) debates in the 1990s which pitted China against the US worker. If so, there the possibility of serious trade tensions that promise to derail parts of the bilateral relationship and invite tit-for-tat economic retaliation.  China’s neighbors, Korea and Japan, may also be in the crosshairs as both are serious global competitors in manufacturing and high-tech industries–precisely where Trump has pledged to rebuild America.  In Latin America, a pending renegotiation NAFTA could re-scramble trade relations that have been largely sedentary for decades with increased pressure on Mexico.

Why does this matter?  Apart from the fact the international education itself is a tradable service (referred to in the US as a “deemed export”), a country’s trade with the rest of the world is often correlated with international study activities.  Limiting trade flows impacts economic, human and technology exchange which logically feeds into international educational exchanges.  In more practical terms, trade deals relating to IP protection and knowledge industries–such as the TPP–were designed to form greater protections that include the ability for American universities to conduct research and development on a global basis. In this sense any future trade tensions may also impact America’s education presence abroad.

Final Reckoning?

It is too early to handicap how deep and fast such changes can impact America’s international education activities, and there are counter arguments to consider.  I remain cautiously optimistic that Trump will see the light on international education. This is because Trump’s changes to trade agreements and the international order may be more symbolic than substantive, and the time it takes to effect such change can be measured in years or decades rather than months.  Moreover, a stronger and more entrepreneurial US economy sits well with potential students around the world and could also reinforce the overall attraction of US study, despite the proclaimed focus on domestic revival.  Finally, the alternatives for international students looking for liberal, English speaking study destinations are limited:  consider that the UK post-Brexit is moving toward their own stricter immigration laws while Australia, a prime potential beneficiary from Asian students, has only one-fifth the level of foreign students compared to the US and a lot less infrastructure to sustain student growth. Canada, despite its attractions, represents an even smaller higher education market.

In the end, President Trump could also recognize that what makes America great is its universities and schools, at home and abroad, which play a critical role in creating knowledge, technology, scientific discovery, and of course, direct and indirectly–stable jobs and badly needed exports.

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