San Francisco/Washington: In a move that could significantly affect the US technology industry, the Trump administration announced on Friday its proposal to impose a $100,000 annual fee for companies sponsoring H-1B visa workers. The proposed fee, which would be applied each year for the duration of a worker’s visa, is seen as a potential blow to the tech sector, which has long depended on skilled labor from countries like India and China.
The announcement is the latest in a series of actions by the Trump administration to tighten immigration policies. Since taking office, Trump has pursued a broader crackdown on both legal and illegal immigration, and this proposed change to the H-1B visa program represents one of the most aggressive steps yet in reshaping the landscape of temporary employment in the U.S.
Speaking about the proposal, U.S. Commerce Secretary Howard Lutnick remarked, “If you’re going to train someone, train an American graduate from one of the top universities. Stop bringing in people to take our jobs.” The statement highlights the administration’s ongoing focus on promoting American workers over foreign labor, particularly in industries like tech, where H-1B workers have played a central role.
The H-1B visa program, which allows U.S. employers to hire foreign workers in specialized fields such as technology and engineering, has long been a subject of debate. Supporters argue that it is crucial for filling skill gaps in the labor market, while critics contend that it has been exploited to lower wages and replace American workers with cheaper foreign labor.
This proposal could significantly affect tech giants and startups alike, which rely heavily on the H-1B program to bring in talent from abroad. Companies like Amazon, Microsoft, Meta, and smaller firms in Silicon Valley often employ large numbers of H-1B visa holders to meet their staffing needs, especially in fields like software engineering, AI development, and cloud computing.
A Potential Setback for Global Competitiveness
Industry experts have warned that the proposed fee would discourage top-tier talent from considering the U.S. as a destination for employment, potentially reducing the country’s competitive edge in the global tech race. Deedy Das, a partner at venture capital firm Menlo Ventures, expressed concern over the long-term impact, saying, “Adding such a fee creates a disincentive to attract the world’s smartest talent to the U.S. If we stop bringing in the best, we risk stagnating our innovation and economic growth.”
The fee proposal could disproportionately affect smaller tech startups, which may struggle to absorb the added costs of hiring international talent. Critics argue that the move could ultimately push more tech jobs overseas, weakening the U.S.’s leadership in fields like artificial intelligence and machine learning, where China is emerging as a formidable competitor.
Impact on India and China
India, which accounted for 71% of all H-1B visa recipients last year, stands to be most affected by the proposal. China, the second-largest beneficiary, could also feel the impact. The change comes at a time when Indian tech firms, such as Infosys and Wipro, have significant operations in the U.S., employing thousands of workers on H-1B visas. Shares of these companies saw a dip on Friday, reflecting market uncertainty over the potential financial burden the new fee could place on their operations.
Lutnick, however, defended the proposal, claiming that many of the “big companies” have already expressed support for the new fee structure. “We’ve spoken to them,” Lutnick said, without specifying which companies had been consulted.
Legal and Political Backlash
The proposal has sparked immediate backlash from critics who argue that it could be legally challenged. Aaron Reichlin-Melnick, policy director for the American Immigration Council, raised questions about the legality of the new fee, pointing out that Congress has only authorized the government to set fees related to the processing of applications, not to raise funds for other purposes.
The H-1B program currently allows for 65,000 visas annually, with an additional 20,000 visas reserved for workers holding advanced degrees. While the fee is intended to curb the number of foreign workers in the U.S., it is likely to face legal challenges from businesses that argue the policy is an infringement on established immigration law.
The ‘Gold Card’ Proposal
In addition to the H-1B visa changes, the Trump administration also introduced a “gold card” proposal, offering U.S. permanent residency to individuals who are willing to pay $1 million. This proposal, which would allow wealthy foreign nationals to bypass traditional immigration channels, has also drawn criticism for its perceived elitism and potential to undermine existing immigration processes.
As the Trump administration continues its push for stricter immigration controls, the future of the H-1B visa program remains uncertain. With both economic and legal challenges ahead, the proposal to impose a $100,000 fee could reshape the landscape of U.S. immigration policy, with significant implications for the technology sector.
