Higher Ed is an Area of Trade Surplus

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.