Andrea Dugo is an economist at the European Centre for International Political Economy. In the late 1400s, Italy was the jewel of Europe. Venice ruled the seas; Florence dominated art and finance; and Milan led in trade and technology. No corner of the Western world was more advanced. Yet, within decades, both its political independence and economic primacy were gone. Europe today risks a similar fate. Once the envy of the world, the bloc’s lead has eroded. The EU isn’t just politically divided, it’s also falling behind in industries that will define the rest of this century. Young talent is fleeing for the U.S. and Asia, while its economy increasingly resembles an open-air museum of past achievements. Whether in growth, technology, industry or living standards, Europe is in jeopardy of becoming a province in a world defined by others. And it stands to learn from Italy’s decline. The warning signs are unmistakable: Since 2008, the EU’s GDP expanded by just 18 percent, while the U.S. grew twice as fast and China grew nearly three times bigger. Tourism across the continent is still booming, of course, but the millions chasing their Instagram-able escapes aren’t enough to offset stagnation, and also bring costs. The bloc’s fall in living standards echoes Renaissance Italy as well. Around 1450, Italy’s income per person was 50 percent higher than Holland’s. A century later, the Dutch were 15 percent richer, and by 1650, they were nearly twice as rich. Modern Europe is slipping even faster than that. In 1995, Germany’s GDP per capita was 10 percent higher than America’s, whereas today, the U.S. is 60 percent higher. At this pace, Germany’s prosperity levels could shrink to a third of its transatlantic partner’s within a generation. Much like in Renaissance Italy, this economic malaise reflects a deep technology gap. Once the queen of the seas, Venice clung to old technology and paid the price. Its galleys, superb in calm Mediterranean waters, were no match for the ocean-going caravels that carried Spain and Portugal across the world. Modern Europe is now doing the same: On artificial intelligence, the EU invests barely 4 percent of what the U.S. does. Today, OpenAI is valued at $500 billion, while Europe’s biggest AI startup Mistral is worth just $15 billion. And though it pioneered the science in quantum, Europe trails behind in commercialization — a single U.S. startup, IonQ, raised more capital than all the bloc’s quantum firms combined. Even when it comes to batteries, Sweden’s much-touted Northvolt collapsed in March, only to be snapped up by a Silicon Valley startup. Traditional industries are faltering too. Taken together, Germany’s top three carmakers are worth just an eighth of Tesla. Ericsson and Nokia, once world leaders in mobile network technology, lag behind Asian rivals in 5G. And France’s Arianespace, once dominant in satellite launches, now hitches rides on tech billionaire Elon Musk’s rockets. The problem isn’t invention, though — it’s scale. Despite its top engineers and universities, nearly 30 percent of the bloc’s unicorns have transferred to the U.S. since 2008, taking its most entrepreneurial spirits with them. It seems the continent sparks ideas, while America fuels them and profits — yet another pattern that mirrors Italy, which supplied talent as others built empires. Its greatest explorers like Columbus, Cabot, Vespucci and Verrazzano had also trained at home, only to sail under foreign flags. The prescriptions are known. Former Italian Prime Minister Mario Draghi detailed them in his report on the EU’s future. | Thierry Monasse/Getty Images The fundamental issue in both cases is political. Like Italy’s warring city-states in the 1500s, today’s Europe is divided and feeble. Capitals quarrel over energy, debt, migration and industrial policy; a common defense strategy remains only an aspiration; and ambitious plans for joint technology spending or deeper capital markets get drowned in debate. This disunity is what doomed Italy as it fell prey to foreign powers that eventually carved up the peninsula. And the bloc’s current divisions leave it similarly vulnerable to global competitors, as Washington dictates defense; Russia menaces the continent’s east; China dominates supply chains; and Silicon Valley rules the digital economy. But is this all fated? Not necessarily. The EU has built institutions Renaissance Italy could never have dreamed of: a single market, a currency, a parliament. It still hosts world-class research institutions and excels in advanced manufacturing, pharmaceuticals, aerospace, green energy and design. The continent can still lead — but only if it acts. Sixteenth-century Italy had no such chance. Geography trapped it in the Mediterranean while trade routes shifted to the Atlantic, and commerce stagnated. New naval technologies left its fleets behind, and its brightest minds sought their fortunes abroad. But Europe faces no such limit. Nothing is stopping it other than its own political timidity and fractiousness. The bloc needs to accept costs now in order to avoid the greatest of costs later: irrelevance. It needs to invest heavily in frontier technologies like AI, quantum, space and biotech, while also building real defense and creating deep capital markets so that start-ups can scale up at home. The prescriptions are known. Former Italian Prime Minister Mario Draghi detailed them in his report on the EU’s future. What’s missing is political will. Once Europe’s beating heart, Italy eventually became a land of visitors rather than innovators. And history’s lesson is clear: Its culture endured, but its power withered. The EU still has time to avoid that destiny. Europeans can either wake up or resign themselves to becoming a continent of monuments and echoing memories.

Ivo Daalder, former U.S. ambassador to NATO, is a senior fellow at Harvard University’s Belfer Center and host of the weekly podcast “World Review with Ivo Daalder.” He writes POLITICO’s From Across the Pond column. When U.S. President Donald Trump first met with then-German Chancellor Angela Merkel after his first term began, he told her that Germany’s lack of defense spending was a problem. It meant the U.S. had to spend too much. “Angela, you owe me $1 trillion,” he said. In the end, Germany never paid a penny. But this exchange set the tone for how Trump would approach the presidency in his second term. Whether a person, business, university, law firm, media company or country — Trump has used the power of the presidency to exact a price, often in dollar terms, from whoever he interacts with. It’s the unifying theme of his leadership and his approach to the world. Donald Trump is the “Shakedown President.” It started even before he won reelection. At a dinner in Mar-a-Lago with some 20 top oil executives in April 2024, Trump told attendees to raise $1 billion for his reelection campaign, which, he promised, would be a great “deal” because he’d cut red tape and lower their taxes on “Day One” of his presidency — and that was just the beginning. Since returning to the White House, Trump has turned the Oval Office into the pay-to-play room: It’s where he met the managing head of venerable New York litigation firm Paul, Weiss and twisted arms to get $40 million in annual pro bono work for causes he deems worthwhile. In return, he rescinded an executive order he’d signed, barring the firm from federal contracts and its employees from holding security clearances. Seeing the writing on the wall, eight other white-shoe law firms then followed in Paul, Weiss’s footsteps, signing deals with the administration that collectively promised more than $1 billion in pro bono services for Trump’s priorities. Smelling victory, the president soon set his sights on other industries, starting with big media: He sued ABC and CBS News when they broadcast interviews he didn’t like and got them to pay $15 million and $16 million, respectively. The president reached multimillion dollar settlements with tech companies Meta and X. And while his multi-billion-dollar suit against the New York Times was thrown out, the Wall Street Journal’s is still pending. Tasos Katopodis/Getty Images Aside from the steep monetary value, these shakedowns have also made media companies more adverse to reporting criticism of the president and his administration’s actions. Next came universities: Long the foundation of America’s scientific and technological supremacy, Trump cut off federal research funding for major universities in order to force them to adopt policies favored by his administration. Some institutions, like Columbia University, Brown University and the University of Pennsylvania, obliged, agreeing to pay eight-to-nine figure “fines.” Others, like Harvard University, resisted and have been financially squeezed, seeing their critical scientific research grants cancelled. Corporations haven’t escaped Trump’s crosshairs either, despite much of corporate America backing Trump in the latest election. He approved Nippon Steel’s takeover of U.S. Steel, but only after demanding a “Golden Share” in the company, which grants his administration extraordinary control and veto authority over operations and decisions. He also turned a government subsidy to Intel into a 10 percent stake in the company — with the option for another 5 percent down the road — and approved chip sales to China by Nvidia and AMD in return for a 15 percent levy on all sales. Then, there are America’s trading partners, which are, notably, some of its closest allies. Here, Trump brokered remarkably similar and extraordinarily one-sided deals with the EU, Japan and South Korea, after threatening to impose tariffs of 25 percent or more on all imports from America’s largest trading partners in the Europe and Asia. He finally “compromised” at a 15 percent levy that was still six times higher than before and, of course, his victory has left the U.S. public as the real losers, facing higher prices on a wide variety of goods. But that wasn’t all. Trump also exacted commitments from these governments to make large-scale investments in the U.S. — $350 billion by South Korea, $550 billion by Japan and up to $600 billion by European companies. Europe also agreed to purchase $750 billion in gas and other energy products over four years. And here’s the kicker: In most cases, Trump will control where the investment goes, and the U.S. will receive most of the profits — up to 90 percent in the case of Japanese investments. In the short term, the Shakedown Presidency works. Individuals, law firms, media companies, universities and even countries calculate they’re better off paying a little than fighting a lot. And once one of them does, others follow. Pretty soon, it’s a billion here, a few hundred billion there, and it all adds up to real money. But — and this is crucial — in the long term, this is bound to fail. These shakedowns create massive resentment among those who bear the consequences. Clients, partners and associates search out other firms to bring their business to; readers, listeners and viewers tune out media companies they can no longer trust; and countries begin to shift to markets and partners that won’t use their interconnectedness to serve the narrow, selfish ends of one man and his administration. So far, Trump has been able to shake down a good many individuals, succeeding as he picks off firms and countries one by one. But soon, everyone will get wiser and realize they have alternatives — and that when they unite, Trump will be unable to continue his shake down operations.

University leaders who have struggled to counter the Trump administration’s monthslong campaign to rewrite higher education just caught the biggest break academia has had all year. Massachusetts Institute of Technology President Sally Kornbluth’s public rejection Friday of an offer to voluntarily link the school’s federal funding to President Donald Trump’s higher education priorities on college finance, hiring and admissions came after a string of setbacks for elite institutions in particular. “Today really felt like the clouds were breaking,” Ted Mitchell, the former president of Occidental College, said after MIT’s announcement. “One of the things I appreciate most about Sally Kornbluth’s letter is that she is capturing what a lot of presidents are saying behind the scenes.” The Trump administration has spent the year trying to assert control over universities by launching civil rights probes, freezing millions in federal research dollars and throttling their international student enrollment. And while the federal government has spent months in court fighting Harvard University, Columbia University — the administration’s first target — signed a deal over the summer that Trump critics saw as capitulation. Over the past few weeks, Trump administration officials have flipped their strategy and are now trying to sell universities on a deal that will net them federal cash, business and a bit of White House praise — a suite of benefits that aren’t explicitly in the contract. It’s an arrangement former college presidents are urging their schools to reject. “It’s pretty vague what the advantages are of signing the compact,” said Teresa Sullivan, the former president of the University of Virginia, one of nine colleges the Trump administration is trying to court. “If you’re thinking of this as a deal, it’s a one-sided deal.” The benefits of Trump’s “compact” include “increased overhead payments where feasible” and “substantial and meaningful federal grants,” according to a cover letter sent to university leaders alongside the agreement. But the White House is offering things colleges enjoyed until just a few months ago. Sullivan and others say the offer is all sticks and no carrots. And while the compact itself makes no mention of the benefits the White House is offering, it does spell out what costly financial penalties schools will face if they fall short of what the administration deems as compliance. Mitchell, who now leads the American Council on Education, which represents roughly 1,600 institutions, said many university leaders agree with statements about the need for addressing the cost of college, discrimination and free speech. “But we will not compromise our independence as institutions and we will not allow higher education to be an instrument of the government,” he said. Education Secretary Linda McMahon, White House Domestic Policy Council Director Vince Haley and senior adviser May Mailman are spearheading the effort, having started with Vanderbilt, Dartmouth, University of Pennsylvania, University of Southern California, MIT, University of Texas at Austin, University of Arizona, Brown University and UVA. Those officials say universities have long benefited from their relationships with the government. That includes access to federal student loans, competitive grant programs and federal contracts to fund research, approval for foreign student visas and tax-exempt status for the vast majority of institutions. The White House now wants these colleges to make changes to their admissions policies, faculty hiring, how they use their endowments and ensure there is “a broad spectrum of viewpoints” on campus. Trump officials also want the schools to freeze their tuition for five years, cap their international undergraduate student enrollment at 15 percent, ensure sex is defined as “male” and “female,” and adopt a policy of institutional neutrality, which means their campuses won’t weigh in on societal and political events. “Institutions of higher education are free to develop models and values other than those below, if the institution elects to forego federal benefits,” the compact said. A school found in violation of the document by the Justice Department will lose access to federal student aid, grants and contracts and more for at least a year. Institutions would also have to pay back all federal cash they’ve received that year to the government along with any private donations, if the donors ask for them back, according to the compact. Former presidents, including some who once led those institutions, are urging current leaders to resist what they see as unworkable mandates and severe penalties. “The potential sanctions are existential,” one former university president told POLITICO. “To me, it feels like a federal takeover of higher education.” A White House official on Thursday said the administration has received widespread engagement on the compact and there is some flexibility to negotiate the terms. “We’ve heard from many current and former university leaders who think the US university system needs significant change to get back on track,” a White House official said in a statement. “President Trump is delivering lasting reform to make our universities once again the envy of the world.” Spokespeople for the Education Department did not respond to a request for comment. Former Dartmouth President Phil Hanlon said some of the compact’s goals — like cost control and protecting broader expression of viewpoints — are reasonable. But he warned that most provisions are nonstarters. “All of these, at least in my mind, are quite extreme demands that universities forfeit self-governance and academic freedom,” Hanlon said. “There are certainly ways in which U.S. higher education needs to improve. But universities always have, in my experience, worked towards self-improvement without the need to have someone hit them over the head with a cudgel.” Sullivan, the former UVA president, said one of the greatest issues higher education leaders must weigh is how this compact could affect their finances. “The part of this compact that shows the least sophistication is the part that deals with finances,” Sullivan said, pointing to the mandates on tuition pricing and how endowments are used. “It just read to me as pretty naive about how higher education finance works.” She said Trump’s compact ignores inflation, the cost of new technology, faculty benefits including health care, and unpredictable state appropriations. “You don’t have that many levers to pull if you cannot ever increase tuition,” she said. “This puts the university in an impossible situation. They have to control their prices but no one else has to control theirs.” The initial group of nine universities has been asked to submit feedback by Oct. 20, with an eye toward inviting those schools in “clear alignment” with the administration’s effort to the White House by Nov. 21. How those first nine leaders respond could usher in a new era of how the federal government decides which schools it will work with and the terms they must agree to. But so far, several leaders appear to be leaning towards aligning with Kornbluth’s decision. UVA’s interim President Paul Mahoney and Rector Rachel Sheridan told their campus community, “It would be difficult for the University to agree to certain provisions in the Compact.” Dartmouth College President Sian Leah Beilock wrote a letter to her campus noting “we will never compromise our academic freedom and our ability to govern ourselves.” And University of Pennsylvania President Larry Jameson in his message to campus said “Penn seeks no special consideration. We strive to be supported based on the excellence of our work, our scholars and students, and the programs and services we provide.” But for some schools, their presidents aren’t the final say. “Regardless of what some presidents may think about it, governing boards make policy,” Sullivan said. At the University of Texas, Board of Regents Chair Kevin Eltife said they were “honored” that their flagship campus made the White House’s initial list of outreach. Hanlon, the former Dartmouth president, said the “greatest risks to the partnership between higher ed and the U.S. government” are still ahead. “I liken the partnership to the goose that laid the golden egg for the U.S.,” Hanlon said. “So let’s not kill it.”

RINGASKIDDY, Ireland — When Pfizer started manufacturing its anti-impotence drug Viagra in southwestern Ireland, locals experienced a spike in sexual arousal, five-legged rabbits proliferated, and visitors took U-turns back to their spouses after fumes from its local plant drifted in through their car windows.   That’s according to local legend, at least.  These stories “transited through the local pub,” said Pat Hennessy, a long-term resident of Shanbally, just up the road from the coastal village of Ringaskiddy. “There was a girl there and she said: ‘One whiff and they’re stiff.’”   The impact of Big Pharma on the area, however, goes far beyond amusing anecdotes: Its arrival in the 1970s turned a sleepy fishing village into an industrial powerhouse and turbocharged economic growth in County Cork. But today, the industry — and the region that depends on it — are in the eye of U.S. President Donald Trump’s tariff storm.  As he drives to slash the massive U.S. trade deficit, Trump says he is determined to reshore the production of weight-loss drugs, cancer treatments and other pharmaceuticals. He has threatened to eventually slam tariffs as high as 250 percent on the sector.  Ireland, Trump says, “took our pharmaceutical companies away” with its tax policies: Of the $213 billion of medicines the U.S. imports, the largest share comes from Ireland, a global leader in the production of expensive brand-name medicines. Dublin’s liberal tax regime has exerted an irresistible pull on U.S. Big Pharma for decades.  Locals find only limited solace in a deal struck in July between the European Union and the White House which — at least on paper — caps U.S. tariffs on pharmaceutical imports from the EU at 15 percent and exempts generic medicines. Ireland, as one of the EU’s most open economies, is particularly vulnerable to the tariffs, and uncertainty persists over Trump’s next moves and the damage they could inflict.  “It’s still like an axe hanging over us,” said David Collins, the fifth-generation owner of a family-run store in Carrigaline, a commuter town 20 minutes by bike from Ringaskiddy. “It’s a constant threat.”  The area is home to seven of the 10 largest pharma companies worldwide. More than 11,000 people in County Cork work in the industry — with tens of thousands more in ancillary jobs. Ringaskiddy alone hosts Pfizer and Johnson & Johnson, Sterling Pharma Solutions producing for Novartis, as well as smaller firms such as Recordati, BioMarin and Hovione. In addition to Viagra’s active ingredient, critical components of cardiology, immunology and oncology medications are made here.   PITCH AND PUTT  When Pfizer arrived in 1969, its workers spent their lunch breaks building a course to play pitch and putt — a scaled-down version of golf — for the local community, recalled Michael Goably, a pensioner, while enjoying his morning coffee at the clubhouse of Raffeen Creek Golf Club, nestled on the lush shores of Cork harbour.  As the name suggests, a nine-hole golf course, also built on land owned by Pfizer, now complements the pitch and putt. It’s just one example of how the area has benefited from big pharma: Ask the locals, and they’ll tell you the industry’s contribution far outweighs the side effects, such as commuter traffic and environmental pollution.  “I couldn’t say a bad word,” said Ray Keohane, another golfer taking a break on a bench between rounds.  The town of Carrigaline, once an agricultural village, now counts 20,000 residents, as well as a hotel, several supermarkets and a lively shopping street.  “When I was a child growing up in Carrigaline, there was one main industry, and it was called Carrigaline Pottery … there wasn’t a family in the area of Carrigaline that didn’t at least have one person working in the pottery,” said Collins, the supermarket owner.  “Roll on 50 years later, that’s been replaced by the pharmaceutical industries.”  CELTIC TIGER  The arrival of multinational corporations softened the impact of the closure of manufacturing sites by carmaker Ford and Dunlop, a tyre company, in the 1980s. “Ireland as a country wasn’t doing well, but Cork was a particularly black spot then,” said John O’Brien, a lecturer in finance at University College Cork. “The combination of pharmaceuticals and IT … together really have brought up the city,” he added, referring to Ireland’s second-largest city Cork, which hosts the EU headquarters of tech giant Apple.   Nationally, the success in the pharma sector helped drive economic growth in Ireland’s “Celtic Tiger” era from the 1990s to the late 2000s. That’s thanks to large-scale foreign investment — especially from the U.S. — low corporate taxes, a skilled English-speaking workforce and EU membership.  According to Louis Brennan, an emeritus professor at Trinity College Dublin, pharma’s contribution was threefold: It created high-value and high-paying jobs, led to the development of an ecosystem of suppliers and subcontractors, and generated government revenues.   Cork has also established itself as a hub for higher education in pharma-related fields.   TARIFF GAMES  Since Trump’s return to the White House, that engine of the Irish economy finds itself under (verbal) attack, exposing just how much Irish success hinges on the country’s capacity to remain the go-to location for U.S. firms, which beyond welcoming tax benefits have also long shifted their profits and patents there.  “We want pharmaceuticals made in our country,” Trump told CNBC in August.  As part of his vow to slash drug prices and bring manufacturing back to the U.S., Trump in April opened a so-called Section 232 investigation into the pharmaceutical sector to probe the impact of imports on national security and impose tariffs if needed.   Analysts estimate that Trump is unlikely to impose a tariff as high as the threatened 200 or 250 percent. However, a first “lower tariff” — no higher than 15 percent, provided Trump does indeed stick to the terms of the EU-U.S. agreement — could yet be followed by a heavily disruptive tariff of around 50 percent after a year or two. The message isn’t lost on big pharma: Giants such as Eli Lilly and Johnson & Johnson have this year announced new investments in the U.S. Yet experts warn Trump’s tariff policy risks driving up drug prices and leading to shortages, rather than spurring large-scale relocation.  While the 15 percent tariff cap foreseen by the EU-U.S. deal offers the industry a reprieve, companies need to make tricky calculations, warned Dan O’Brien, chief economist at the Institute of International and European Affairs, an Irish think tank.  “For those products that are uniquely made in Ireland there is at least some element of a buffer: It’ll take a few years for production to move out of Ireland, in a worst-case scenario,” he said. For products also made elsewhere, it will be easier to shift production and “could happen more quickly,” he added.  RISKY BUSINESS   For now, those scenarios remain hypothetical — but the unpredictability is already leaving its mark.   As companies rushed to export their goods, Irish pharma exports to the U.S. surged by nearly 50 percent in the first five months of this year. “Geopolitical concerns” now rank among the top three threats to business in the Cork Chamber of Commerce’s last survey of its members.  Companies are mostly keeping quiet. Pfizer and Johnson & Johnson declined to comment for this story, whereas Sterling Pharma Solutions, BioMarin, Recordati and Hovione did not respond to requests for comment. Novartis, which is supplied by Sterling Pharma Solutions, warned that “the introduction of tariffs risks creating additional barriers that could further delay access to life-saving treatments.”  Giants such as Eli Lilly and Johnson & Johnson have this year announced new investments in the U.S. | Cristina Arias/Getty Images Reacting to the deal between the EU-U.S. deal, the Irish Pharmaceutical Healthcare Association warned that “tariffs on medicines would be a substantial new cost where there was none before and a drag on investment, jobs and innovation.”  A worker at a pharma plant in the area, granted anonymity to protect their job security, told POLITICO output had slowed in the last couple of months as the company waited to regain planning certainty. Similarly, Dan Boyle, a Green Party councillor for Cork and the city’s former mayor, said companies told him that “our hope was that we would have announced future investment for 2030, and that’s being sat on, until we know what the situation is going to be.”  UNDER PRESSURE  Local, national and European politicians are acutely aware of just how much is at stake.  Séamus McGrath, a Dáil deputy for the Cork South-Central constituency, called for a “continuous process of renegotiation and engagement” with Washington.   “We need to renew our pitch and renew our attraction as a country for foreign direct investment,” said McGrath, sitting in the lobby of the Carrigaline Court Hotel, the town’s only hotel. “You cannot sit back.”   The politician with the co-governing centrist Fianna Fáil party entertains strong ties with Brussels, not least thanks to his brother, EU Justice Commissioner Michael McGrath.  In the EU capital, lawmakers from the region are urging the EU to boost the bloc’s competitiveness. Cynthia Ní Mhurchú, of the liberal Renew Europe group, called for cutting “excessive red tape” for businesses. And Seán Kelly, an MEP with the centre-right European People’s Party, welcomed the European Commission’s plans to secure access to new markets through trade deals.  After all, for locals back on the Irish coast, power politics determine no less than their personal future.  “They say they [the big companies] will go away,” said Amy Lyons, a bartender at Ringaskiddy’s only pub, The Ferry Boat Inn.    “I’m doing a biopharma course in college. So, imagine I get my degree, and they are gone,” she added as she drew pints for the regulars, who were discussing a new road being built to ease road congestion — caused by commuter traffic to the pharma plants.  Graphics by Hanne Cokelaere.

LONDON — Thought writing a 10,000-word dissertation was tricky? Try managing Britain’s embattled university sector.  As students pack their bags, sort their kitchenware and prepare for the time of their lives at campuses across the U.K., university officials face the headache of keeping their struggling institutions economically viable — all while politicians take potshots at them. “The underlying financial settlement for universities is not really sustainable,” warned Universities UK International Director Jamie Arrowsmith, an organization representing 141 universities.  International students provide significant income to the sector by paying considerably higher tuition fees than domestic students. However, Labour’s bid to slash migration levels means international students are in the firing line. It’s a stark contrast from Tony Blair’s New Labour government in the 2000s, which was “actively encouraging the growth of the international student population,” according to Labour peer and former Universities Minister Margaret Hodge. She recalled writing to Blair espousing how this expansion would increase the U.K.’s soft power: “If you wanted to create good diplomatic connections and promote peace across the world, those student relationships paid off fantastically.” A string of policy changes has left institutions searching elsewhere for cash, as Prime Minister Keir Starmer focuses on disadvantaged British youngsters. A white paper due this fall will outline specific higher education reforms, including calls for universities to contribute more to economic growth. The sector warns it could all be undermined if the government keeps discouraging overseas students from coming to Britain. PULLING UP THE LADDER  Britain’s universities have an enviable reputation. The QS World University Rankings in June put 17 U.K. universities in the top 100, while a London Economics report calculated higher education contributed more than £265 billion in the 2021/22 academic year. It’s little wonder students across the globe want to study here. Anxious about populist parties like Reform UK, Tory and Labour governments have seen fewer foreign students as a way to get numbers down. | Richard Baker / In Pictures via Getty Images But while international students starting in 2021/22 brought net economic benefits of £37.4 billion, they’re also counted in immigration figures — and that’s a headache for the government. Anxious about populist parties like Reform UK, Tory and Labour administration have seen fewer foreign students as a way to get numbers down.  They were banned from bringing family members on all but post-graduate research routes back in January 2024. That decision by then-Conservative PM Rishi Sunak followed 135,788 visas being granted to dependents of foreign students in 2022, nearly nine times the 2019 figure. Arrowsmith said he understood why the policy was introduced, but warned it had hit “the U.K.’s attractiveness” to prospective foreign students, particularly when “other countries have had more open and welcoming policies over the last three to four years.” Home Office figures in October 2024 showed the effect — with an 89 percent drop in visa applications for dependents between July to September 2023 and the same period in 2024. Tory peer and former Universities Minister, David Willetts, said he understood concerns about dependents, but thought it should be made clearer to voters that students are only temporary migrants. “My constituents, when I was an MP, who worried about migration, were worried about [people] coming to Britain to settle, to use the NHS,” he said. “They weren’t worried about a Chinese student doing physics for a couple of years.” Fellow Tory peer and former Universities Minister Jo Johnson concurred, saying people were more concerned with illegal immigration. “They’re a very special category of immigration that’s more akin to tourism or temporary visitors.”  Now, Labour is wearing Conservative clothing.  The Home Office marked the new academic term this week by directly contacting tens of thousands of foreign students, warning them not to outstay their visas and telling them they “must leave”  if they have “no legal right to remain.”  The immigration white paper published this May also planned to reduce the graduate visa — where international students can remain in the U.K. after finishing their qualification — from two years to 18 months in most cases. Ministers have also mooted a levy on fees universities receive from foreign students to reinvest in domestic training. A graduation student sits outside Senate House at Cambridge University. | Joe Giddens/PA Images via Getty Images Johnson, however, said the Treasury didn’t like raising money for a specific purpose, meaning the Department for Education “may be being rather optimistic” in assuming revenue would go towards skills.  Hodge was similarly sceptical: “If it were linked to encouraging international students, but recognizing there might be a cost to public services, I think I’d feel more comfortable,” she said. “At the moment, I’m not sure that it’s anything else other than raising more money.” The moves have also upset the main higher education union. “Unfortunately, the government remains wedded to a funding model that leaves international students propping up U.K. higher education,” said University and College Union (UCU) General Secretary Jo Grady in a statement to POLITICO. She added: “Their fees are essential to the financial stability of the sector, so it is economically illiterate that Labour has refused to lift the Tories’ visa restrictions.”  STRAPPED FOR CASH Though Education Secretary Bridget Phillipson insisted the government will “always welcome international students where they meet the requirements to study,” some have taken the hint — and given the U.K. a pass.  In 2023/24, 732,285 overseas students studied at U.K. higher education providers, a 4 percent drop from the 2022/23 record high and the first fall since 2012/13. The number of student visas granted also fell from its record in 2022 of 484,000 by 5 percent in 2023 and 14 percent in 2024. The drop-off was particularly acute among EU students. After Brexit, European students weren’t eligible for home student status, meaning they paid international fees and couldn’t acquire a student loan.  This led to a 50 percent drop in accepted applicants for U.K. undergraduate study from EU countries in 2021/22, which continued to fall the following two years.  Universities still need to pay their bills.  In 2022/23, U.K. higher education providers had an income of £50 billion, of which 52 percent came from tuition fees — international students paid 43 percent of that figure.  The decline “has … been increasingly difficult,” said Arrowsmith, stressing “one of the main sources of funding that was helping to mitigate the reduction in resource is … no longer quite as stable.”  Education Secretary Bridget Phillipson insisted the government will “always welcome international students where they meet the requirements to study.” | Andy Rain/EPA While international fees rose without any cap, domestic tuition fees were frozen from 2017 until this fall at £9,250. Despite rising to £9,535, the hike in employers’ national insurance contributions hampered extra savings — forcing universities to tighten their purse strings. A Universities UK survey of 60 institutions in May found 49 percent closed courses to reduce costs, up from 24 percent in spring 2024. In the same month, the Office for Students, which regulates higher education, forecast a third consecutive year of financial decline in 2024/25.  “Inflation has been particularly high,” argued Arrowsmith, “That really exacerbated the situation,” particularly when there were “increased expectations” on academic research. It’s little surprise the House of Commons’ Education Committee is investigating potential insolvency within higher education institutions.  The Department for Education reiterated that the independence of universities meant they must ensure sustainable business models. But Willetts and Hodge disagreed on whether increasing domestic fees would improve the situation. Willetts “would love to see a healthy, proper increase in the fees” to put universities “in a stronger position” rather than relying on overseas students. However, Hodge said the “incredibly expensive” university experience was “almost getting to the cost of going to bloody Eton” and the debt was “putting working-class kids off.” OUT OF THE IVORY TOWERS  To show young people university isn’t their only option, the government launched Skills England and funded a growth and skills levy supporting apprenticeships.  But universities don’t think this should come at the expense of international students. And it seems the public agrees. British Future research found 54 percent of people thought international students enhanced the reputation of U.K. universities overseas, while 61 percent thought the government should increase or keep the amount of overseas students the same. Domestic students were supportive, too. “British students appreciated the opportunity of studying with students from other countries,” said Willetts. “It enriched the experience.” Education wonks believe focusing too much on domestic skills could come back to bite ministers — and excessive policy changes prevents what international students, and employers, want most of all: clarity. “They need certainty and stability if they’re going to make decisions,” argued Arrowsmith, stressing frequent alterations under different administrations made “prospective students think twice [about Britain] as a destination.”  The UCU echoed this and felt Britain should be open for business.  “We are also calling on universities to join us in the fight for a more open border policy that will protect the sector, help contribute tens of billions of pounds to the economy, enrich our society and bolster the U.K.’s global standing,” said Grady. A government spokesperson said: “We recognize the valuable contributions which genuine international students make to the economy and the university sector and we want them to continue to come to the U.K.” But they argued: “We are simply tightening the rules so those wishing to stay in the U.K. must find a graduate-level job within 18 months, which is fair for both students and to British workers and taxpayers.”

The Department of Homeland Security said Wednesday it intends to publish a proposed rule that would limit the length of time foreign students are allowed to stay in the United States. Since 1978, foreign students, or F visa holders, could stay in the U.S. for their “duration of status,” meaning as long as they were enrolled as a full-time student. The proposed rule set to publish Thursday would allow for foreign students and exchange visitors to stay up to the duration of the program they are participating in, not to exceed a 4-year period. DHS officials said the rule is to correct a system in which foreign students have “taken advantage of U.S. generosity” by becoming “forever students.” “For too long, past Administrations have allowed foreign students and other visa holders to remain in the U.S. virtually indefinitely, posing safety risks, costing untold amounts of taxpayer dollars, and disadvantaging U.S. citizens,” a DHS spokesperson said in a statement. “This new proposed rule would end that abuse once and for all by limiting the amount of time certain visa holders are allowed to remain in the U.S., easing the burden on the federal government to properly oversee foreign students and history.” If finalized, the rule would require foreign students to be regularly assessed by DHS to remain in the U.S. for a longer period. Advocates who represent foreign students, said this rule will create uncertainty for these students and leave them with more bureaucratic hurdles to clear. “International students deserve assurance that their admission period to the U.S. will conform to the requirements of their academic programs,” said Miriam Feldblum, president and CEO of the Presidents’ Alliance, which represents 500 presidents and chancellors of public and private colleges and universities. “They already represent the most closely monitored population in the U.S. and are subject to rigorous oversight by DHS and academic institutions.” The proposed rule could dissuade some students from choosing to study in the U.S., said Fanta Aw, executive director and CEO of NAFSA: Association of International Educators. “It will certainly act as an additional deterrent to international students choosing to study in the United States, to the detriment of American economies, innovation, and global competitiveness,” Aw said in a statement. The logistical hurdles, such as pauses in visa interviews, have already caused international student enrollment to take a hit. A report from the Institute of International Education, which collected feedback from hundreds of U.S. higher education institutions, found that 35 percent of the schools they surveyed saw a decrease in applications for this fall, compared with only a 17 percent decrease the previous academic year. There are also serious financial implications for colleges if fewer foreign students enroll, because they typically pay more tuition and receive less scholarship support.

Midsummer is usually a period when Spain’s politicians flee Madrid’s scorching heat in order to relax on one of the country’s many beaches. But this year many are postponing their coastal exodus to huddle in their offices and conduct frantic reviews of their CVs. The mass revision of résumés has been prompted by the abrupt resignations of at least three politicians revealed to have lied about their academic credentials. The first to be exposed was Noelia Núñez, deputy secretary of the center-right People’s Party (PP). The up-and-coming lawmaker was seen as one of the most promising figures in Spain’s leading opposition party because of her popularity among young conservatives on TikTok. But in July it was revealed that although her profile in the Spanish parliament’s website said she held a “dual degree in Law and Public Administration,” she held no degree whatsoever. Journalists also discovered that her profile at Guatemala’s Francisco Marroquín University, where N´úñez taught a Political Science course, falsely claimed that she also held a degree in English Philology. News of the politician’s fake CV credentials came at an awkward moment for the PP. Since last May, when Spanish Prime Minister Pedro Sánchez was forced to publicly apologize for the corruption within his Socialist Party, the leading center-right political force has pitched itself as a “clean” group that Spaniards can trust. After meeting with opposition leader Alberto Núñez Feijóo, Núñez announced her resignation. Shortly thereafter, her party ordered its officials to review their CVs to make sure no other falsehoods would be uncovered. DUMMY DEGREES But less than a week later, another set of fake credentials was uncovered. This time, however, they belonged to Socialist Party official José María Ángel Batalla, whom the national government had tasked with overseeing reconstruction efforts following last year’s deadly floods in Valencia. Batalla claimed to hold a degree in Archival Science and Library Science from the University of Valencia issued in 1983 — a remarkable feat given the university in question did not teach that subject until 1990. The discovery of the falsehood has not only prompted the official’s resignation, but it could potentially land him in serious legal trouble. Because Batalla used the fake degree to successfully apply to join Spain’s public service in the early 1980s, he could be prosecuted for defrauding the state for more than 40 years. The latest official to step down is Ignacio Herrero, who until Friday held the key forest and land management portfolio in Extremadura’s regional government, and who was a member of the far-right Vox party until last summer. Like Batalla, Herrero claimed to have obtained a degree in Marketing from the CEU University decades before students were able to acquire that title at that institution. CLASSIST CRITERIA? Spanish politicians are not required to hold university degrees in order to sit in the country’s parliament, but officials are exposed to social pressure to boast academic titles that underscore their suitability for public office. That tendency both responds to the aspirational views of older citizens who were unable to pursue higher education — just 22.5 percent of Spaniards held degrees in the year 2000 — and reflects younger generations’ view that university studies are a given. The boom in the number of universities in Spain over the past 20 years has eased access to such an extent that today nearly half of Spaniards aged 25 to 34 have higher education degrees. In the past, several politicians have gotten into trouble while attempting to bolster their credentials. Former PP leader Pablo Casado faced public ridicule for claiming to hold a postgraduate degree from Harvard which later turned out to be a diploma for attending a three-day course offered by the prestigious U.S. university in Madrid. Meanwhile, former socialist Health Minister Carmen Montón stepped down from her post after it was revealed that she had plagiarized her master’s thesis. And the Madrid region’s former center-right president, Cristina Cifuentes, was ensnared in a scandal over the alleged manipulation of her records at the capital’s Rey Juan Carlos University. In response to questions about the recent resignations, Deputy Prime Minister Yolanda Díaz said the fake CVs reflected a problematic “class-based debate” when it comes to university degrees in Spain. Despite holding a “technical” portfolio as Spain’s labor minister, Díaz insisted that “politics isn’t a technical matter,” and should also be open to citizens whose socioeconomic or personal circumstances impeded them from acquiring higher education degrees. “Anyone can be a politician,” Díaz said on Telecinco, adding that she knew plenty of officials who hold no academic titles and are great at their jobs because they take the time to master the areas they oversee and work hard to accomplish the tasks at hand. “We can’t demand all of our politicians hold degrees,” she said. “I say that as someone who has known many ministers with tons of degrees who are terrible when it comes to public administration.”

Ivo Daalder, former U.S. ambassador to NATO, is a senior fellow at Harvard University’s Belfer Center and host of the weekly podcast “World Review with Ivo Daalder.” He writes POLITICO’s From Across the Pond column. In the competition between China and the U.S., China is winning. That isn’t a conclusion many would have drawn six months ago, but now it’s inescapable. What’s different today is that since taking office, the administration of U.S. President Donald Trump has taken many steps that play directly into its adversary’s hands, weakening its own ability to outcompete. And we will soon be at the point where this trend is irreversible. For decades, China followed Deng Xiaoping’s dictum to “hide your strength and bide your time.” Unfortunately, most Western countries, led by the U.S., ignored the latter part of this admonition — that Beijing was biding its time — and instead focused on China as a huge new market for Western goods, services and capital. Everyone could get rich from China getting rich, or so it seemed — a sentiment that Deng and his successors were absolutely fine with. Their purpose, however, wasn’t to get rich just for the sake of it, but to gain the necessary power to compete and win against the world’s sole remaining superpower. So, by the time Xi Jinping ascended to power in 2013, China no longer needed to bide its time, and it started to show its strength. In the past decade, China increased its military spending by 800 percent — the biggest military build-up in peacetime history. It now deploys more naval vessels than the U.S.; it is modernizing its nuclear arsenal, aiming to reach close to parity with Russia and the U.S. by the end of the decade; and it flexes military muscle in places that have long been under the sole purview of the U.S. However, while its military expansion and reach is impressive, China’s economic, scientific and technological advances are most worrisome. Seventy percent of the world’s countries now trade more with China than with the U.S., with over half of them trading twice as much with China. In Trump’s own words, America may be a big department store, but the products you can buy in its stores — and in those across the world — are made in China. Trade isn’t the only market Beijing’s cornered either. Following a clear and consistent strategy that was first outlined by Xi in 2015, today it leads the world in electric vehicles and batteries, robotics, quantum communications, renewable technologies and more. Indeed, according to one study, while 20 years ago the U.S. led China in 60 of the 64 frontier technologies key to defense, energy, computing, biotech and other sectors, China now leads in 57 of these technologies. This determination to win is particularly obvious in one area that has featured prominently in the news recently: rare earth elements and magnets that are critical for defense, electronics and green-technology manufacturing. As it stands, China holds almost 50 percent of the world’s rare earth reserves, controls 70 percent of rare earth mines and accounts for 90 percent of global rare earth refining capacity. It also controls over 90 percent of critical magnet production, and successfully used that near-monopoly to force the Trump administration into backing down from its escalating tariff war and chip export controls. Seventy percent of the world’s countries now trade more with China than with the U.S., with over half of them trading twice as much with China. | Alex Plavevski/EPA But even in the areas where the U.S. retains a lead — think AI and quantum computing — China is catching up. The release of DeepSeek, for example, shocked the AI community for its speed and sophistication, as it nearly equaled the vastly more expensive models developed by U.S. tech companies. And the next DeepSeek generation, I’m told by a top Microsoft AI official, may even exceed the most advanced models from OpenAI and other firms. All of this indicates China’s not only catching up but, in many ways, surpassing the U.S. America has many advantages in this race — which is how it has managed to stay ahead, even as Beijing embarked on its long-term strategy to overtake it. But in the past six months, the Trump administration has systematically begun to dismantle many of them. Let’s take partnerships: The biggest advantage for the U.S. is that it has allies, while China has clients. Collectively, the U.S. and its allies can outcompete, outspend, out-innovate, out-trade, out-finance and out-attract others to its side. But Washington’s allies in North America, Europe and Asia increasingly — and rightfully — fear that the current “America First” policy is putting them last. They’ve been told to defend themselves, to pay 15 percent or more in tariffs and, in the case of Canada and Denmark, to cede territory. As a result, they’re turning toward each other and reducing their military, economic and political ties to Washington. And that’s not all. The Trump administration is also pursuing funding policies around universities and immigration that directly undercut America’s ability to compete with China. For 80 years, federal research dollars funded scientific and technological breakthroughs like the internet, genetic sequencing, space exploration, vaccines, cancer cures and much more. The country’s modern research universities led the way in spurring these innovations, drawing talent from across the globe to benefit from and contribute to its ecosystem of innovation. But Trump has now cut federal funding for basic research by a third, blocked research grants to top universities for purely ideological reasons and tightened immigration for international students and scholars. One poll suggests that 75 percent of scientists in the U.S. today are looking to leave the country and work elsewhere. It’s hard to underestimate the damage these policies are doing to U.S. competitiveness. To give just one example, many of the country’s closest allies are now offering lucrative grants and research opportunities to entice the talent pool at the core of America’s success as a global innovation machine. This isn’t just shooting yourself in the foot — it’s shooting yourself in the head. And unless Washington rectifies the situation swiftly, it will find not just Beijing but other parts of the world passing it by.

Texas let undocumented young people qualify for in-state college tuition for 24 years. President Donald Trump convinced the state to unravel the policy in a matter of hours. Since returning to the White House, Trump’s Justice Department has launched legal challenges against laws in Texas, Kentucky and Minnesota that allow undocumented students to pay the tuition rate reserved for state residents. That price can often be half of what out-of-state students are responsible for. Discounting tuition for undocumented immigrants brought to the U.S. as children has a long bipartisan history. Texas’ law was signed by Republican then-Gov. Rick Perry and 23 red and blue states, plus the District of Columbia, followed, a political mood that’s now reversing: Florida repealed its 2014 in-state tuition law this February. There are about 408,000 undocumented students representing less than 2 percent of those in college. The Justice Department argues these tuition laws unfairly offer a benefit to foreigners that is unavailable to U.S. citizens and legal residents living in a neighboring state. The legal offensive to roll back these laws, which is poised to spread, serves as another sign of how thoroughly the second Trump administration is going about enacting the president’s promise to discourage illegal immigration and promote “self-deportation.” “This was something that used to not be political,” Kentucky Gov. Andy Beshear, a Democrat, said of the in-state tuition policies for undocumented students. “It was the idea that if this is the only country you’ve ever known, that more than likely you will be here your entire life, and we should want you to be educated and productive.” But Kentucky’s Republican attorney general, Russell Coleman, sided with Trump this summer, urging the state’s council on postsecondary education to “withdraw its regulation rather than litigate what I believe will be, and should be, a losing fight.” Texas, the first state the DOJ targeted with a lawsuit this year, ended its policy in coordination with the White House. The maneuver came after Attorney General Ken Paxton entered into a joint motion with the Justice Department, agreeing that providing in-state tuition to undocumented students wasn’t constitutional. “In-state tuition for illegal immigrants in Texas has ended,” Republican Gov. Greg Abbott wrote in a post on X last month. The policies are crumbling at a time when college enrollment — and the tuition dollars it brings in — fell about 15 percent between 2010 and 2021, according to the National Center for Education Statistics’ most recent report. The math is also looking complicated for many schools because the State Department could impose restrictions on international student enrollment, and there is an overall decline in the number of high school seniors. But the Trump administration said states have created laws that favor undocumented students over U.S. citizens. “Under federal law, schools cannot provide benefits to illegal aliens that they do not provide to U.S. citizens,” Attorney General Pam Bondi said in a statement to POLITICO. “The Justice Department will relentlessly fight to vindicate federal law and ensure that U.S. citizens are not treated like second-class citizens anywhere in the country.” About 119,000 undocumented students are protected under the Obama-era Deferred Action for Childhood Arrival program, which spurred in-state tuition laws for these students and received bipartisan support for years. Now, many Republicans are turning against such policies. Rep. Randy Fine (R-Fla.) introduced the Florida bill in December that eventually ended the tuition break while serving in the state Legislature. He said the laws Trump is challenging amount to incentives for immigrants to cross the border. “It’s immoral to give in-state tuition to someone who shouldn’t even be in America,” Fine said in an interview. “Think about it. A Georgian who wants to go to Florida State is paying more to go to a Florida institution than a foreigner. It’s just not right to do and that’s why we cleaned it up in Florida. It’s time for illegals to go home.” The Florida repeal took effect in July, prompting concern from education advocates who say the legislation could result in Florida institutions losing nearly $15 million in tuition and fees from potential drops in enrollment. In Texas, advocates say more than $461 million annually is at stake. “What I know for certain is that a significant number of students are living with anxiety,” said Manuel Gonzalez, vice chair of the Austin Community College Board of Trustees, which is suing over Trump’s challenge against Texas. “Not just about how they’re going to afford college, but how are they going to navigate an increasingly more hostile political climate that often vilifies their existence.” The National Immigration Law Center, alongside a host of organizations including the ACLU of Texas and Democracy Forward, are seeking to defend the Texas policy, challenging both the outcome and the process that led the state to gut its law. Education advocates argue that making college more expensive is hardly a deterrent for undocumented immigrants looking for a better life for their families. “Nobody from Guatemala or Mexico starts googling and thinking, ‘What state should I move to so that after my child finishes their education, they’ll be able to get in-state tuition to a college?’” said Gaby Pacheco, president of The Dream.US, which advocates for DACA students’ college education. The policies remain alive in more than 20 states, including California, New York, Kentucky and Minnesota, but opposition from Republicans is rising. A bill to block “undocumented noncitizens” from accessing Minnesota’s North Star Promise program, which makes college tuition free for state residents whose families make less than $80,000 a year, moved through the statehouse during the previous legislative session. Roughly 500 students a year qualify for in-state tuition in Minnesota under the state’s Dream Act. The Trump administration’s challenges stem from the president’s April executive order that directed agencies to crack down on policies that benefit undocumented people and deemed in-state tuition laws illegal. On Wednesday, the Education Department announced five new probes into University of Louisville, University of Nebraska Omaha, University of Miami, University of Michigan and Western Michigan University, arguing that their scholarships for undocumented students are discriminatory. If Kentucky and Minnesota fold alongside Texas, other states could be vulnerable to the administration’s efforts, immigration experts fear. “Just as Texas was the first state to pass a Dream Act in 2001, later inspiring 23 other states and the District of Columbia to pass similar laws, this wrongful and undemocratic repeal of the law is now being pushed as a blueprint to undemocratically end in-state tuition, militarize college campuses and persecute students in other states,” Juan Jose Martinez-Guevara, Texas advocacy manager of the nonprofit United We Dream, said at a Tuesday press conference. Immigration advocates say there is supposed to be a legal carveout specifically for DACA students that allows them to pay in-state tuition rates, but confusion over the law has some Texas colleges charging those students the out-of-state rates. A DOJ spokesperson declined to comment on whether DACA students should be considered exempt. The number of DACA students is dwindling — both because of the program’s 2007 arrival cutoff and legal challenges from the first Trump administration and others seeking to end it — but the president’s actions could have long-lasting consequences, political analysts say. Trump’s legal challenges contradict earlier promises to “work with the Democrats on a plan” — as he noted in December — for Dreamers. That dissonance might cost Republicans some of the votes Trump received in 2024, particularly from independents and Hispanic Americans, said Brendan Steinhauser, an Austin-based political consultant who’s worked with Texas Republicans such as Sen. John Cornyn and Rep. Dan Crenshaw. “He definitely did really, really well with Hispanic Americans, especially in South Texas and other places,” Steinhauser said. “But he’s not running for reelection. So, he may just think, well, it doesn’t matter what his approval numbers are.” Steinhauser also insisted the president’s legal challenges are in line with his larger crackdown on immigration. “It’s symbolic, yes, but it’s all real,” he said. “And it’s having an impact, I believe, in the same way that these raids are having an impact on incentives.” Elena Schneider contributed to this report.