The USA has been the leading country for research and innovation since WWII. The government itself has done very little of this work. It decided back then to outsource the work to universities. There were a few steps between what the president wanted and what the universities did, but that’s what happens when you delegate and don’t try to micromanage.
As with so many other things, it’s easy to take this success for granted, to assume it is the natural order of things. But what happens if the president does try to micromanage the research? What if the president doesn’t understand the system he is in charge of? What if he is a gangster as well?
In this case, research money is not there for the good of the country, but as a means to threaten and extort. He thinks that everybody is like him and only interested in money, and that they will do anything to protect the precious government grant money.
Harvard has done the calculation. If they give in, they will lose their reputation for academic independence and excellence. The brightest and best will go elsewhere, where they can pursue their research outside of a dictatorship. If they resist, the brightest and best will still go elsewhere, because there is no government money to pay them – but they retain their integrity and reputation. If they can weather the storm.
They are suing the government. Other universities are taking note.