Trump’s $4 Billion Funding Cut Might Trigger Departure of Chinese Researchers

TMTPOST -- The Trump administration is cutting billions of dollars in medical research funding for universities, hospitals, and scientific institutions by drastically reducing the amount allocated for indirect costs—expenses that support such research, including buildings, equipment, and staff.

The National Institutes of Health (NIH) announced that it would limit indirect funding to 15% of grants awarded to institutions, a significant reduction from previous levels. The move is expected to slash research spending by $4 billion annually.

“The United States should have the best medical research in the world,” the NIH stated on Friday. “It is accordingly vital to ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead.”

In the 2023 fiscal year, NIH awarded $35 billion in grants, with $9 billion directed toward indirect costs. The agency justified the change by claiming that the new rate aligns more closely with private foundation requirements.

Budget cuts at the NSF are almost certain to reduce researchers' chances of receiving NSF funding, which currently stands at about 25%, as per a report from Science magazine.

An American higher education lobbyist commented, “If the success rate drops to 10%, why bother applying? … If researchers can’t secure funding in the U.S., they may decide to leave the country.”

As early as January 28, Nature magazine reported the confusion caused by the Trump administration’s freezing and later rescinding of federal funding under the headline "Trump Team Announces Federal Funding Freeze, U.S. Science Community in Chaos."

Since then, scientists from various fields have reported their funds being frozen, with no clear timeline for unfreezing them. Both Science and Nature published exclusive investigations outlining this “scrutiny” of research funding, concluding that, “Funding has been unblocked, yet research projects continue to be scrutinized, causing confusion.”

According to Nature, more than 100 postdoctoral researchers directly funded by NSF-supported projects were locked out and had no idea how to sustain themselves. Although the system has now been restored, the postdocs continue to worry about how to pay for food, rent, and credit card bills. This sense of uncertainty has spread throughout the entire funding system.

However, the decision has been applauded by Trump supporters advocating for government spending cuts. The “Department of Government Efficiency,” led by billionaire Elon Musk, celebrated the move, tweeting that the NIH had done an “amazing job” in reducing waste.

On February 7, the NIH declared a reduction in its indirect cost funding, capping it at 15% of grant values. Indirect costs, which cover essential expenses such as facility maintenance, utilities, and administrative support, typically range from 30% to 70% of a grant's value. This reduction translates to an annual decrease of approximately $4 billion in NIH funding.

Universities and research institutions rely heavily on indirect cost funding to maintain their research infrastructure. The sudden decrease has led to concerns about the sustainability of ongoing projects and the potential for increased financial burdens on these institutions. Dr. Harold Varmus, a Nobel laureate and former NIH director, warned that even brief uncertainty could cause significant disruptions in research planning and clinical trials.

Simultaneously, the NSF is confronting a proposed budget reduction of nearly two-thirds, decreasing from its current $9.1 billion to $3 billion. This drastic cut is expected to significantly lower the success rate for grant applications, which currently stands at about 25%. A reduction in funding opportunities may discourage researchers from applying for grants, potentially leading to a talent exodus from the United States.

The NSF has also suspended grant review meetings in compliance with recent executive orders, further delaying the funding process and adding to the uncertainty faced by researchers.

These funding cuts are part of a broader initiative led by the Department of Government Efficiency (DOGE), headed by Elon Musk. In its first three weeks, DOGE has identified over $1 billion in spending cuts, focusing on programs related to diversity and digital modernization projects. The department plans to target larger areas, including healthcare programs, in the coming months.

The Washington Post reported that NSF officials will refer to a "sensitive words" list to analyze whether terms potentially violating Trump's executive orders appear in the titles, abstracts, and descriptions of projects. If a project contains "sensitive words," it will be flagged by NSF for "further action," potentially requiring modifications or even full termination.

In the report, Morteza Dehghani, a professor of psychology and computer science at the University of Southern California, said that keyword-based censorship "is unprecedented in the history of the National Science Foundation."

A document circulating online allegedly contains some of the "sensitive words" used in NSF's reviews. Darby Saxbe, a professor of neurobiology at the University of Southern California, posted the list on X (formerly Twitter), claiming it came from an NSF staff member.

The sensitive words in the list include terms related to DEIA such as "diversity," "equity," and "inclusion," political terms like "advocacy," "privilege," and "endorsement," gender-related terms like "women" and "gay," race-related terms such as "Black and Latino," "Hispanic," "discrimination," as well as "disability," "trauma," "hate speech," "underrepresented," and others like "systemic," "socioeconomic," "cultural heritage," and "history."

These words, which are often used to describe the significance and impact of scientific research, and which previously enhanced project applications, have now suddenly become "sensitive" and are on the blacklist.

What do these sensitive words mean in specific research contexts? Professor Saxbe explained passionately: "The term 'systemic' is on the banned list, so research on 'systemic inflammation and health' would be specially scrutinized; studies involving political science would also be closely reviewed. The largest mental health service provider in the U.S. is the Veterans Administration, but if I research (post-war psychological) trauma, it would still be specially reviewed. If I study anxiety using 'threat-biased attention,' it would also be scrutinized because 'bias' is on the list."

The administration has also implemented a temporary freeze on federal funding and banned diversity-related research, creating further uncertainty within the scientific community. Researchers fear that projects related to climate science, public health, and social sciences may be particularly vulnerable under these new policies.

The scientific community has expressed alarm over these developments. Many researchers are concerned about the potential halting of critical studies, layoffs, and the long-term impact on America's leadership in scientific innovation. The reduction in indirect cost funding, in particular, threatens the operational capabilities of research institutions, potentially leading to increased tuition fees and a slowdown in scientific progress.

Seven years after U.S. President Donald Trump’s administration launched the controversial China Initiative—targeting scientists over alleged ties to Beijing—the government agency responsible for many of the investigations has acknowledged the “difficult climate” created by its inquiries but stopped short of issuing an apology.

The U.S. National Institutes of Health (NIH), the country’s leading agency for biomedical and public health research, reported that as of June 9, a total of 112 scientists—predominantly of Asian descent—had lost their jobs through dismissals or forced retirements due to alleged undisclosed connections to China.

Beyond raising questions about the integrity of numerous researchers, the NIH’s crackdown on Chinese-born U.S. faculty members has drawn criticism for negatively impacting life sciences research in the United States.

In August 2024, NIH Director Monica Bertagnolli released a statement expressing support for Asian-American, Asian immigrant, and Asian research colleagues. She acknowledged that government actions had “the unintended consequence” of making many Asian researchers feel “targeted and alienated.”

Amid large-scale layoffs in the U.S. government, NSF is also not immune. Bloomberg reported that both Trump and Musk aim to reduce federal government employees by as much as 10%. Currently, more than 20,000 employees—approximately 1% of the total workforce—have signed resignation agreements, accepting the government's recently offered so-called deferred retirement "buyout plan," which includes about eight months' worth of salary compensation. February 6 will be the deadline for this "early retirement plan."

A project manager at the National Science Foundation, who requested to remain anonymous, stated that the Trump administration is attempting to "scare people into quitting out of fear," Politico reported.