Money? Yes.
Talent and connections? Not necessarily.
Top PhD students are still coming to America.
It’s the money-grabbing 12-month masters programs that are the problem.
Come buy a F-1 student visa for $200k! It’s the Trump silver card.
They probably are, and that won't stop anytime soon. The question is how much talent is being lost now.
The admin stopping some research for no reason probably got a lot of PhD students quite distrustful of the US, that could cause some of them to go back after their thesis. Top PhD often choose countries for the lab director and the thesis subject. The US lost a few lab directors in the last 6 months, and at least in therapeutic engineering this year doesn't propose a lot of new thesis subjects (less than last year it seems), but maybe they keep them for their own students.