Who Loses in Trump’s Trade War? American Public Universities

LOS ANGELES, CA - NOVEMBER 19:  University of California Los Angeles (UCLA) students Andrea Flores (L) and Kendall Brown (R) and other UCLA students and supporters demonstrate outside the UC Board of Regents meeting where members voted to approve a 32 percent tuition hike next year on November 19, 2009 in Los Angeles, California. Undergraduate fees for students at the California university system would be increasing by about $2,500. It is the second day that demonstrators, including students from other UC campuses, have gathered to try to dissuade the board from approving the proposed increase. Massive cuts to balance the state budget have squeezed education funds in California.   (Photo by David McNew/Getty Images)

(Photo by David McNew/Getty Images)

A version of this article appeared on The WorldPost. Below is the text as I originally wrote it.

Who are the likely casualties in Donald Trump’s proposed trade war with China? During the campaign, Trump famously called for a 45 percent tariff on Chinese goods, an act that would virtually guarantee retaliation from Beijing. Several major U.S. corporations have already been singled out by Chinese state media: Boeing could lose major orders to Europe’s Airbus, Apple’s supply chain could be disrupted, and American agricultural giants could see steep tariff hikes on soybean exports to China. As real as those hits to bottom lines might be, you won’t see many tears shed for the boards of Fortune 500 companies.

But a more sympathetic and troubling case is found in a sector that could find itself on the chopping block: U.S. public universities. That’s because growing numbers of international students — particularly those from China — have been a lifesaver for public colleges in an era of dramatic cuts to public funding for higher education.

This year the number of international students at U.S. colleges and universities topped one million for the first time ever. The 328,547 Chinese students studying here made up almost one-third of that total and nearly double that of second-ranked India, according to the Institute for International Education’s new Open Doors 2016 report.

The vast majority of these students pay full-tuition straight out of their family coffers, effectively subsidizing local students who benefit from in-state discounts. In California, out-of-state and international students pay roughly $38,000, almost triple the $13,400 tuition for local students. Last year Chinese students alone infused $11 billion into the U.S. economy, while international students support over 400,000 jobs in the U.S, almost half of these in blue collar sectors such as retail, restaurants and accommodation.

Despite Trump’s claim that he “loves the poorly educated,” public higher education is one slice of the economy that America can’t afford to sacrifice. America’s public colleges are both a vital part of many small town economies, and one of the last bastions of economic mobility for the working class. The New York Times’ annual College Access Index declared the University of California system to be an “upward mobility machine,” consistently fostering opportunity for students from poor families.

The problem is that massive state budget cuts mean that the “upward mobility machine” is constantly low on fuel. States have been decreasing funding for public universities for decades, but since the 2008 economic crisis that defunding has gone into overdrive. Between 2008 and 2016, per-student state funding for higher education has fallen in forty seven of fifty states. States such as Illinois and Arizona have seen per-student funding cut by more than fifty percent. Not coincidentally, over that same period the number of Chinese undergrads at the University of Illinois at Urbana-Champaign has multiplied by a factor of twelve, from 257 to 3,115.

USC students on their way to attend a memorial service on April 18, 2012 in Los Angeles, California, for the two Chinese graduate students who were shot to death near campus last week. US authorities have offered $200,000 in reward money to find whoever killed the two students, after more funds were pledged on April 17.  Los Angeles has a large Chinese and Chinese-American population, including many overseas students and certain areas of the city are known for frequent gun violence. AFP PHOTO/Frederic J. BROWN (Photo credit should read FREDERIC J. BROWN/AFP/Getty Images)

But are Chinese students taking the place of local students, or are they subsidizing local enrollment with their elevated tuition?

California has been a living laboratory for this question. In the years following the financial crisis, the University of California system saw its funding cut by one-third, while the number of Chinese students at campuses like UC Berkeley nearly tripled. Those full-tuition Chinese students were life-support for the cash-strapped system, allowing it to hold local enrollment totals steady despite devastating budget cuts.

But the surging international enrollment led to a public anxieties that admission was being auctioned to the highest bidder. An audit by the state claimed that local students were hurt by the infusion of outside students, and that the UCs didn’t sufficiently expand enrollment for disadvantaged minorities for whom public universities may be their only option. In exchange for increased funding, this year the UC system capped international enrollment and increased local enrollment by 15 percent, including large gains for underrepresented groups.

That complex balancing act — ensuring that expanded international enrollment supports local students — is one best carried out at a local level. Instead, Donald Trump’s proposed policies and off-the-cuff pronouncements threaten to cut off this last resort source of funding for American higher education.

First, the policies. Faced with a trade war, cutting Chinese enrollment at U.S. schools would be one of Beijing’s stronger weapons in an otherwise limited arsenal. Higher education is one of the few sectors in which the United States boasts a substantial trade surplus with (i.e. depends heavily on) China. While Beijing has few direct ways of stopping students from studying abroad, Chinese officials have many indirect levers for manipulating these flows.

Public schools across the U.S. — from Humboldt State University to NYU — have formed partnerships with Chinese institutions that act as funnels for studying in the United States. Those programs could be dissolved with the stroke of a bureaucrat’s pen. China’s Ministry of Education could easily crack down on the vast number of “international schools”, special bilingual high school curricula designed as a runway for students planning to study abroad (a move that local officials in Shanghai initiated even before the election). More hard line forms of retaliation could extend to cutting off currency transfers or even withholding passports from students.

But beyond any specific policies, Trump own statements appear likely to slow or reverse growth in international students more broadly. Students in countries such as India, the second-largest feeder country and the fastest growing, are already reconsidering plans to study in the U.S. due to fears of racism and Islamophobia. Saudi Arabia, the third-ranked feeder country, could see an even steeper fall. While Chinese people were not themselves a direct target of Trump’s rhetoric (“I love China!”), racial tensions surrounding the election were enough for the Chinese Consulate in San Francisco to issue a warning and offer a hotline for Chinese nationals victimized by racist attacks.

The potential hit to higher education in many way pales in comparison to the other dangers of a Trump presidency: rising hate crimes, dangers to immigrant families, and climate deniers at the EPA, to name a few. It’s also far from clear whether President Trump will in fact follow through on his pledge to punish China for trade policies that he has compared to “rape.”  Trump himself has said that he wants the U.S. to retain talented international students who graduate from U.S. universities. (In the same interview, now “senior counselor” Steve Bannon decried the presence of too many asian CEOs in Silicon Valley.)

But as President of the United States, both words and actions have consequences, and often not those one intends. Any trade war with China likely won’t bring jobs back to America’s rustbelt towns — multinational corporations are already chasing cheaper wages to Jakarta or Mumbai. But trade frictions with China could have very real consequences in some unexpected places, from Madison, Wisconsin to Austin, Texas.

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