Washington/San Francisco: In a sweeping move that could dramatically impact U.S. technology firms, the Trump administration announced a proposal on Friday to charge companies a $100,000 annual fee for each H-1B visa they sponsor. The new fee, which would be assessed for each of the three years that the visa holder is employed, has raised concerns about the future of skilled labor in the technology sector, particularly in companies that rely heavily on workers from India and China.
The announcement is part of the Trump administration’s broader immigration crackdown, which has already targeted various aspects of legal immigration. The H-1B visa, which allows U.S. employers to hire foreign workers in specialized fields like technology, engineering, and healthcare, has long been a point of contention. While critics argue the program undermines American wages and job opportunities, supporters claim it is essential for filling critical talent shortages.
Tightening of Immigration Rules
Commerce Secretary Howard Lutnick, a key figure in the administration’s immigration policy, explained the rationale behind the new fee. “We should be training Americans to take these jobs, not relying on foreign workers,” Lutnick said. “It’s time to stop bringing in workers who may undermine the opportunities for U.S. citizens.”
The Trump administration has already rolled out numerous changes to the immigration system, from limiting refugee admissions to curbing work visas. This proposal, however, marks one of the most significant attempts to alter the H-1B program, which grants 65,000 visas annually, along with 20,000 additional visas for those with advanced degrees.
Tech Sector Fears and Resistance
The proposed fee comes at a time of heightened tension between the Trump administration and the tech industry, a sector that has been a major beneficiary of the H-1B program. Companies like Amazon, Microsoft, and Meta, as well as a host of smaller startups, depend on foreign talent to fill positions in areas where domestic workers are often in short supply. In particular, workers from countries like India and China, who often hold advanced degrees in science, technology, engineering, and mathematics (STEM), have been instrumental in driving innovation.
The proposed fee could have a particularly harsh effect on smaller companies and startups, which may lack the financial resources to absorb the cost of the new visa fees. As a result, the policy could discourage entrepreneurship, stifle job creation, and push even more high-value work overseas, critics warn.
Deedy Das, a partner at Menlo Ventures, a Silicon Valley-based venture capital firm, voiced concerns about the long-term impact on U.S. competitiveness. “The U.S. has always prided itself on being a magnet for the world’s brightest minds. But if we put up these kinds of barriers, we risk losing our innovation edge to other countries, like China, that are eager to attract top talent,” Das said.
Legal and Economic Uncertainty
While the Trump administration has framed the new fee as a necessary step to protect U.S. jobs, the proposal is already facing significant pushback. Some legal experts argue that the fee may be unconstitutional, as Congress has only authorized the government to charge fees related to processing applications, not to create new revenue streams for the federal budget.
Aaron Reichlin-Melnick, policy director at the American Immigration Council, criticized the plan, calling it a “blatant misuse of executive power.” He warned that the move could lead to legal challenges, especially from businesses that rely on the H-1B program.
On Wall Street, the news sent shockwaves through the stock prices of several tech companies. Shares of Cognizant Technology Solutions, a major IT services company that employs large numbers of H-1B workers, dropped nearly 5% on Friday. Similarly, U.S.-listed shares of Indian tech giants Infosys and Wipro saw declines ranging from 2% to 5%.
India and China Among the Biggest Stakeholders
India, which historically receives the majority of the H-1B visas, will likely be most affected by the proposal. According to recent data, Indian nationals accounted for 71% of all H-1B visa holders last year. The move could also have an adverse impact on Chinese workers, who make up 11.7% of visa recipients.
In response to the proposed changes, some Indian officials expressed concern over the potential economic and diplomatic fallout. The Indian Embassy in Washington has not yet issued an official statement, but experts suggest the country may push back diplomatically against what it views as discriminatory policies.
The situation is further complicated by the fact that many top tech executives, including Tesla CEO Elon Musk, who himself was an H-1B visa holder, have voiced support for the program. Musk and others argue that it’s vital to continue attracting international talent in order to remain competitive, particularly in rapidly evolving fields like artificial intelligence and quantum computing.
The $1 Million “Gold Card” Proposal
In addition to the proposed fee, the Trump administration introduced a new policy aimed at attracting wealthy foreign nationals willing to invest in the U.S. economy. Under the “gold card” plan, individuals who can pay $1 million will be able to bypass traditional visa processes and obtain U.S. permanent residency. Critics have characterized this as a further attempt to cater to the wealthy elite, potentially excluding skilled workers who cannot afford the steep price.
As the H-1B fee proposal and other immigration reforms continue to move through the political and legal processes, the future of the U.S. tech industry remains uncertain. While the administration frames these policies as necessary to protect American workers, opponents argue that the long-term consequences could be detrimental to the country’s innovation, economy, and global leadership in high-tech industries.
