Sorry that bsky isn't an official news source, but it hasn't been appropriately/fully reported by any standard news source yet. I've linked the formal announcement. The ramifications are only really clear to those in science.
This will decimate US universities, full stop. Billions of dollars in guaranteed funds have just been pulled.
Surely China must be cutting their education investments too? Republicans wouldn't intentionally disadvantage the country against international competition, right? Is America great yet?
If my statement was wrong, feel free to correct it. But based on reading the article, this change is not a "cut" to grants as you indicated in your title.
Will this change cause significant disruption? Almost certainly. But there's an argument to be made for the change, namely that NIH grants should support the science rather than the university and that university overhead costs should be subsidized in some other way.