Trump’s America three months in

Macroeconomic turbulence threatens global stability, whilst cuts to research and universities open opportunities for the UK.

In the first three months of President Trump’s second term, the US and global economies have been disrupted by the nation’s radical change in approach to domestic and global policy. Sweeping reforms are impacting the state of play across sectors and national boarders – with one thing in common: uncertainty.  

Beyond the geopolitical headlines on international tariffs, shifting alliances, and the decline of globalisation, the White House is enacting a series of reforms that will significantly affect science, research, and top global talent.  

This blog digests these moves, what they mean for global research, and the challenges and opportunities they create for the UK.  

Shifting macroeconomics and global relationships disrupt economies and sectors

President Trump’s ‘America First’ approach has swiftly implemented policies of national protectionism, disrupting trade and geopolitics by reshaping international alliances and partnerships. 

The US’s move away from the post-World War II Truman approach to foreign policy, ongoing private negotiations between the US and Russia regarding Ukraine, and declining White House support for Ukraine and Zelensky have forced European nations to reconsider their approaches to defence – creating new opportunities amid shifting responsibilities. The UK’s commitment to raising defence spending to 2.5% of GDP by April 2027, in response to demands from the US that NATO nations to increase investment, has led to the creation of UK Defence Innovation. With a £400m budget, this new body will catalyse innovation and enhance domestic supply chains. 

Elsewhere, the import tariffs levied by Trump – positioned as an act to prioritise US domestic supply chains – has destabilised global economies. The resultant and evolving trade war has left markets and Governments asking what next as they seek a way through choppy waters. The US Government now faces a lack of confidence, with bond yields falling as investors and markets remain wary of the government’s fiscal stability and economic strategy. 

Whilst some ‘winners‘ and ‘losers‘ are emerging, global economies look on with caution in the knowledge that tariffs can undermine productivity, threatening specialisation and economies of scale. Many businesses seek to flow increased costs out to their customers, but their ability to do this, and the knock-on effects for the economy, will be depend on the market response.  

Changing US domestic policy opens opportunities to the rest of the world

Sitting within this macroeconomic picture, domestic policy direction within America has turned sectors upside down.  

Early moves from the White House’s Department for Government Efficiency (DOGE), led by Elon Musk, included a dramatic reduction in the federal workforce, alongside a campaign against diversity and inclusion initiatives. In the first weeks of Trump’s presidency, he froze federal grants. Courts rejected this order; however it led to concern among researchers and their partners about the reliability of their funding sources. These compounding factors now threaten funding to science, universities and research. Recently:  

• NASA could be facing a 50% reduction in funding, in early budget proposals.  

• Grants from the National Science Foundation (NSF) and National Institutes of Health (NIH) have been frozen and risk termination. These have been criticised as “too focused on diversity”, and financial pressures have been compounded through reductions to ‘overheads’ funding.  

• Cancer and Alzheimer’s research are facing cuts. Cuts were temporarily paused by the courts, however the White House found a loophole to delay releasing research funds. 

• Research being conducted by the U.S. Agency for International Development (USAID) has been paused. The Supreme Court has rejected the dismantling of USAID, but 80% of programmes are being terminated.  

• Universities, which derive large swathes of their income from federal research grants, are rescinding offers to PhD students and post-doctoral researchers  

• Harvard University faces a $2bn funding freeze, after the institution rejected White House demands on changes to Governance, hiring practices, and admission policies.  

• In addition to research grants, federal employees working in scientific roles – microbiologists, horticultural researchers, and engineers – are being sacked.  

Many of these changes remain up in the air, with some actions facing challenges in the court system. Regardless of final outcomes, this situation has affected researcher’s certainty and security, as well as the future of the US’ domestic research and development capability, with potential global implications. 

R&D is a crucial aspect of the American economic system, with the nation leading the G7 in R&D investment. Science is a global effort, and any reduction in research capability at this scale affects international scientific discovery, innovation outcomes, collaboration and knowledge sharing – as well as disrupting education, skills supply and research capacity.  

Figure 1. R&D spending as a percent of GDP, 2021, among G7 countries 

The loss of funding most acutely threatens basic research – more than half of which is undertaken within higher education and funded by the federal government, followed by applied research, of which universities undertake a third.  

 Figure 2.  Share of R&D by type of R&D and funding source 

The UK has an opportunity to build bridges across the international R&D community

These changes and cuts threaten and destabilise the performance of science and innovation both within the US, and across the globe. In response, the UK and the rest of the world has the opportunity and the imperative to enable the continuity of critical research.  

Creating new partnerships is key to allowing important research projects to continue, keeping the door open to unimagined scientific discovery. Doing so would bolster the UK’s standing as a global leader in innovation and research, subsequently boosting its productivity and economy. For example, international partnerships open up new routes for direct foreign investment in R&D, which we have argued should be a key area of focus for the UK government. 

Action must take advantage of our national strengths. The UK is a world-leading destination for university research. Its institutions have an opportunity to build bridges with international talent, to attract PhD and post-doc researchers at the forefront of their disciplines, and partner with overseas organisations. Brining this top talent and research activity to UK institutions, and partnering with US teams, would open new opportunities for UK universities who are re-imagining their offering and place in the world. It would enhance the potential for future impact through new spin-outs and commercialisation.  

As we look ahead to the forthcoming Immigration White Paper, this context should shape our national approach to attracting and retaining high-skilled talent. The UK requires a more attractive and simplified system for recruiting top research talent from around the world. This necessitates reform to the barriers limiting applications to the Skilled Worker, Scale Up, and High Potential Individual Visas – action NCUB has consistently called for. 

The UK’s Industrial Strategy could facilitate and maximise outcomes in this space, prioritising investment in emerging technologies where the UK has a competitive edge, and which are threatened by America’s funding cuts, to drive progress and global market share. Figure 3 highlights the sectors with the greatest R&D spend in the US. The UK is already a global leader in several of these sectors – notably chemicals (which includes pharmaceuticals) and professional/scientific activities (given the UK’s extremely strong university sector).  

Figure 3. Percent of total business R&D spending, 2022, by industry 

America’s current uncertainty is an opportunity for the UK to step into the role of global research and innovation leader. To not take advantage of that opportunity would be a mistake.