Dean Baker – Foreign Students Aren’t Just a Large Source of Export Revenue, They Were a Rapidly Growing One

Tuition and other expenses that foreign students pay to study at places like Harvard is a major source of foreign exchange earnings

Dean Baker is a Senior Economist at the Center for Economic and Policy Research (CEPR)

Cross-posted from the Center for Economic and Policy Research

Students from Fudan University and Harvard pose for a group photo in Shanghai – public domain

Remember when Donald Trump was worried about our trade deficit? Yeah, that must have been days ago.

But anyhow, as I and others have pointed out, the tuition and other expenses that foreign students pay to study at places like Harvard is a major source of foreign exchange earnings. Last year, we got more than $56 billion in revenue from these students.

However, foreign students are not just a large current source of earnings; they have been a rapidly growing source. Here’s the picture since 2000.

In the 24 years from 2000 to 2024, revenue from foreign students more than quintupled from $9.7 billion to $56.3 billion. (These numbers are not adjusted for inflation.) By contrast, our exports of meat and dairy products didn’t quite quadruple. At $32.7 billion in 2024, they are considerably less important to the economy than the revenue from foreign students.

Revenue from exports of household products did not even triple. While this source of exports was more than 50 percent larger than payments from foreign students in 2000, it is now less than 80 percent as large at $48.6 billion. Exports of motor vehicles are still larger at $86.9 billion, but the gap is, or was, closing. These trends should emphasize that the Trump administration policies are not just choking off a major export, but one that would likely have been considerably more important in the years ahead.

However, this is not even the most important reason cracking down on international students is bad policy. Many of these students stay in the United States and contribute to the economy with their skills in many of our leading tech companies. And many start their own businesses, employing millions of U.S. workers.

Furthermore, we benefit from having as full an interchange of ideas as possible. Knowledge may scare Donald Trump, but it hugely benefits the rest of us.

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