How Trump’s Proposed $100,000 H-1B Visa Fee Could Stifle U.S. Economic Growth, Experts Warn

Donald Trump’s recent decision to introduce a hefty $100,000 fee on H-1B visas for skilled foreign workers is raising eyebrows among economists. Many say this move could hinder economic growth in the U.S.

The H-1B visa program allows companies to hire foreign workers in specialized fields like tech and science. This fee is about 60 times higher than the current application cost and is aimed at pushing businesses to hire more American workers. However, tech giants, which depend heavily on these visas to bring in skilled employees, could be hit hard. Countries like India supply a large number of these workers.

Atakan Bakiskan, an economist at Berenberg Bank, calls this decision a sign of “anti-growth policymaking.” He warns that making it expensive for companies to hire talent could lead to a “brain drain” as graduates leave the U.S. This could severely impact productivity. Bakiskan recently lowered Berenberg’s growth estimate for the U.S. economy from 2% to 1.5%, fearing that the situation could worsen if these policies persist.

Jim Reid, a strategist at Deutsche Bank, noted that this announcement created a lot of confusion in the tech world, leading some companies to advise their staff to avoid international travel. Notably, the White House clarified shortly after that the fee is a one-time charge for new applicants only.

Kathleen Brooks, research director at XTB, pointed out that major players like Amazon, Microsoft, and Meta heavily depend on H-1B visas. These companies can likely absorb the increased costs, but other sectors, especially healthcare and education, may struggle with recruitment.

In the first half of 2025, Amazon had over 10,000 H-1B visas approved, while both Microsoft and Meta secured more than 5,000. The program allows 65,000 visas each year, with an additional 20,000 for those with advanced degrees.

India is the biggest recipient of these visas, accounting for 71% of approvals last year. India’s commerce minister, Piyush Goyal, criticized the new fee, warning of “humanitarian consequences” for families affected by such changes. He even suggested that the U.S. might be nervous about India’s talent pool.

The market reaction was swift; shares of Indian tech firms like Infosys and Tata Consulting Services fell by about 3%. These companies rely on H-1B visas to staff projects in the U.S.

The impact of this fee could extend beyond immediate market reactions. As Bakiskan notes, long-term effects may include a weaker dollar and increased financial uncertainty. If similar restrictions continue, it’s not just tech firms that could suffer; the entire economy might feel the strain.



Source link