A new study shows President Donald Trump’s tariffs could be putting a whole new trade sector at risk: education.
According to a study by the
UCSD’s School of Global Policy and Strategy
, higher education exports to China are an important part of the economy, and increased tariffs could threaten that source of revenue.
When China entered the
World Trade Organization
in 2001, Chinese exports to the United States increased dramatically. And with that came an income increase for certain Chinese cities, giving more people the opportunity to send their family members to the U.S. for college.
“America’s edge has always been its universities,” Gaurav Khanna, associate professor of economics at the University of California, San Diego’s School of Global Policy and Strategy and coauthor of the study, said in a
release
.
“If we make it harder for international students to come here, we’re not just closing the door on students — we’re closing the door on one of our biggest trade advantages.”
The study estimates that the tariffs levied on China during the first Trump administration led to a 25% drop in students from China attending college in the U.S., costing universities roughly $1.1 billion in revenue. With more tariffs the second time around and more visa restrictions, the potential revenue loss is only expected to grow larger.
In 2019, education exports added $45 billion to the U.S. economy, according to the study. These education export profits also helped universities dealing with cuts in state funding. Public universities were able to lean on international tuition costs rather than increasing tuition costs for in-state students.
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While higher education exports to China existed before China joined the World Trade Organization, it wasn’t on quite the same level. Many college attendees from China were in the U.S. for graduate school and were often on partial to full-scholarship programs. The increase in Chinese imports allowed more middle-class families in China to send their kids to the U.S. for undergraduate degrees, paying full price in tuition, too.
“There’s often an assumption that trade and immigration are substitutes,” Khanna said. “What we found is that they can be powerful complements. Trade helped create a middle class in China that saw U.S. education as both a pathway and a product.”
While not included in the study, there are additional sources of economic contribution from international students. The study does not include possible revenue from the money international students spend on housing, travel, groceries and more.
