You are entirely correct. The massive investment in science (and the culture of valuing scientific knowledge) that started with the cold war is coming to an end. It turns out that destruction is far easier to do than creation.
I was a PhD student in machine learning during the first Trump administration, and even then things were on very shaky grounds. The Muslim ban alone hit really hard, and was a boon for research institutions outside the US. (Look at Canada's Google Brain branch, for instance.)
But, until recently, there was still the plausibility that the whole Trump thing was a flash in the pan. When Trump lost in 2020, there was a sigh of relief that science would continue in the US.
This is on top of plummeting educational attainment in the US and the as-of-yet uncertain ramifications of students widespread reliance on LLMs.
It is very difficult to imagine a path of returning to the good reputation we had in science.