The Trump administration likes to talk a lot about improving America’s trade balance. So the hard-working staff here at Spoiler Alerts thought it might be useful to highlight a key sector of the American economy that is running an ever-increasing trade surplus: education, primarily higher education.
When an overseas student studies at an American university, it counts as an export, because they are paying tuition and other expenses from their home country to the United States. According to a conservative estimate, this sector has gone from accruing a $1 billion annual trade surplus in 1999 to more than $28 billion in surplus in 2015.
This shouldn’t be too surprising. According to a 2016 World Bank study on global talent flows, “high‐skilled migrants are departing from a broader range of countries and heading to a narrower range of countries — in particular, the United States, the United Kingdom, Canada, and Australia.” America’s ability to attract talented students from overseas has been a significant source of this country’s soft power for decades.
So let’s just pause for a second and appreciate just how quickly the Trump administration is managing to torpedo America’s comparative advantage in this area.
If this sounds like exaggeration, consider the following data points. The Chronicle of Higher Education’s Vimal Patel reports on one recent survey of foreign students:
The anti-globalist policies of President Trump and increased isolationist rhetoric in American politics have worried college leaders that fewer international students will want to study in the United States. While it’s still unclear whether enrollments of international students will actually decline, a report released Monday indicates colleges indeed have reason for concern.
Nearly one in three prospective international students surveyed said they had less interest in studying in the United States because of the current political climate, according to the report by Royall & Company, a division of EAB (formerly the Education Advisory Board). Their most cited reason: President Trump. Nearly 69 percent of those students reported “concerns about the U.S. presidential administration” as a factor.
Well, sure, students might say that in a survey, but does it really mean anything? Unfortunately, according to Inside Higher Ed’s Elizabeth Redden, yeah, it does:
Nearly 40 percent of U.S. colleges are seeing declines in applications from international students, and international student recruitment professionals report “a great deal of concern” from students and their families about visas and perceptions of a less welcoming climate in the U.S., according to a survey conducted in February by six higher education groups….
While a majority of institutions are not seeing decreases, steady increases in international applications and ensuing enrollments have become the norm for many colleges. And many institutions have based their financial plans in part on sustained increases in enrollments of full-paying international undergraduates.
The highest reported declines involved applications from the Middle East….
In interviews with Inside Higher Ed, enrollment managers and senior international officers said yield is what they’re watching. Many international students would have already submitted their applications to U.S. colleges prior to Trump’s assumption of the presidency and the imposition of his ban on entry for nationals of six Muslim-majority countries: Iran, Libya, Somalia, Sudan, Syria and Yemen.
The Trump administration is not the exclusive reason for some of these trends. A strong dollar, for example, also makes U.S. education more expensive to foreigners. Still, the contrast between anxiety among American university administrators and the lack of anxiety among Canadian universities is pretty palpable, as Redden’s subsequent story suggests:
At a time when many American universities are reporting declines in applications from international students, some universities north of the border are seeing increases on the magnitude of 20 percent or more. At the University of Waterloo, in Ontario, undergraduate international applications are up by 25 percent and graduate international applications have increased by 41 percent. At McMaster University, also in Ontario, international applications have increased by 34.4 percent compared to the same time last year.
At the University of Toronto, applications from international undergraduate students increased by slightly more than 20 percent this year over last year. Driving the growth are big increases in applications from the U.S. (up 80 percent), India (up 59 percent), Turkey (up 68 percent) and Mexico (up 63 percent, but from a small base).
Other reports suggest the upsurge in Canadian college applications isn’t limited to Toronto.
This problem is only going to get worse, as the Trump administration seems bound and determined to raise the transaction costs of foreigners entering the United States. New, ham-handed travel restrictions from Middle Eastern destinations keep cropping up. Even beyond the Middle East, visa difficulties have led to absurdities like an African trade meeting being cancelled because none of the African attendees could get travel visas.
It’s still too soon to tell how appreciable and how significant the Trump administration’s effect will be on university admissions. It’s possible that yield rates on overseas admissions will actually increase, counteracting the lower level of applicants. Still, we are not even a hundred days into his presidency, and the effects are already observable.
Donald Trump ran on making America great again. Unfortunately, his brand of economic nationalism is guaranteed to make America less talented now and in the future.