The tariff war initiated by United States has begun, catapulting the world into chaos and uncertainties. Jamie Dimon, CEO of JPMorgan Chase, the world’s fifth largest bank, says that a tariff driven recession is now a likely outcome. Although, the severity of the opinions might differ, most economists concur that aggressive tariffs, key policy changes and unpredictability, eroding investor and consumer confidence in the US, are serious enough to cause an upheaval in world trade.
Impact on Education and Employment
For long, US has been a popular destination for Indian students to pursue higher studies. As per Open Doors Report 2024, there were a total of 883, 908 international students in the US during the academic year 2023-24, out of which Indian students were the largest cohort with 331,602. The increase in number of Indian students over the previous academic year at 29.4%, validates the fascination for education and employment in the US.
Whether the world will slip into a recession or not, there’s serious impact on education and employment, in the US. Consider these developments:
- The US government has initiated investigations into the functioning of more than 50 universities. Further, the government has withdrawn or reduced financial assistance to several universities including Columbia, Cornel, Northwestern, Princeton, Pennsylvania etc. Consequently, universities are trimming their budgets, freezing new hiring, reducing admissions, especially in research.
- Currently, as per Optional Practical Training (OPT), students are allowed to work before or after graduation for a period of 12 months and students from Science, Technology, Engineering and Mathematics (STEM), a further extension up to 24 months, giving 36 months, to find a job. Now, a new bill, threatens to cancel this provision, triggering panic in student communities. In the absence of OPT, if students fail to get H1-Visa, which is capped and competitive, they have to face deportation. As per Open Doors Report of 2024, one-third of Indian students in the US were enrolled in the OPT programme. However, as things stand, the passing of the OPT bill is uncertain.
- Adding to the chaos, it’s disturbing to find abrupt withdrawal of F-1 student visas leading to several cases of sudden deportation. US Secretary of State Marco Rubio confirmed last month that at least 300 visas have been revoked, adding that the department was targeting those who were involved in activities that “run counter” to US interests. Historically, political expression has rarely led to deportation, but now in the changed circumstances, students remain vulnerable for deportation.
- These developments could lead to inflation and higher cost of living, increased racism and anti-Indian sentiments, making living in US challenging.
Impact on World Trade
US is the largest economy in the globalized world with about 26% of world GDP and in trade conflict with China, the second largest economy with about 17%, in 2023. Although, 90 days pause announced from imposition of tariffs by the US is welcome in this gloomy situation, the pause doesn’t apply with China. This means, the economies of US and China, accounting for over 40% of world GDP is likely to be affected in this financial year. It’s too early to predict the long-term impact on world economy, as there are hopes of new tariff negotiations.
Risk assessment
Risk Assessment
under the circumstances, students considering higher studies in the US should assess new risks due to tariff wars, slow/negative growth in economy, policy changes in universities and student/employment visa regulations. However, settling down in the US, post education with a job, will be uncertain and fraught with risks.
The other popular destinations for Indian students to pursue higher studies include Europe, UK, Canada, Australia and New Zealand, and these destinations might look more favourable, than hitherto as compared to US. However, impact of tariff wars on economic growth in these countries, is uncertain as of now and needs an assessment, at the time of decision making.
A foreign degree has always been close to the Indian mindset, perhaps influenced by colonialism and lack of opportunities here. However, globalisation has turned India into a knowledge economy, with excellent, world class institutions in science, engineering, medicine, management etc. Simultaneously, many foreign universities have set up base in India. Hence, students should relook at Indian options, for higher studies and augment their efforts, as admission into top Indian universities/institutions is more difficult as compared to universities abroad.
So far, the opportunities of studying in US far outweighed the challenges and now it’s reversed. Therefore, students should carefully evaluate their options for higher studies and tread with caution, while choosing an overseas university.
