Trump’s H-1B visa fee hike will hurt U.S. economy, experts warn

Economists are warning that President Donald Trump’s move to hike the cost of skilled worker visas to $100,000 will work against U.S. economic growth and create headaches for companies.

While the White House clarified on Saturday that the fee would only be applied to new applicants for the long-standing H-1B program, rather than existing ones as previously feared, the decision is still drawing criticism from economists.

Atakan Bakiskan, an economist at Berenberg investment bank, said the move was an example of “anti-growth policymaking.”

“Deportation efforts, attempts to strip work permits from existing employees, and a hostile environment for foreign workers have already caused labour force growth in the U.S. to nearly flatline,” he said in a Monday note. “With the new H1B policy, the labour force is more likely to shrink than expand going forward.”

“The future of economic growth now depends almost exclusively on productivity gains,” Bakiskan added. “However, by making it very expensive for companies to attract foreign talent, and by forcing some international students to leave the country after graduation, the brain drain will weigh heavily on productivity.”

Trump on Friday announced new rules for the visas, which let companies hire foreign workers in jobs such as IT, healthcare and engineering, to work in the country for six years. The new rules include hiking the fee to $100,000, about 60 times the previous cost.

The move sparked panic among some of America’s biggest companies over the weekend. Amazon, Microsoft, JPMorgan Chase, Goldman Sachs and others issued emergency guidance to workers, urging H-1B holders to stay in the country and telling those that live overseas to return to the U.S. before the rule came into place on Sunday.

Across Amazon and Microsoft alone, more than 15,000 H-1B visas were approved in the most recent financial year, according to the Department of Homeland Security. There is an 85,000 annual cap on the visa across the country.

The panic sparked what appeared to be a hasty walk back by the White House, after Commerce Secretary Howard Lutnick had indicated that the fee would be an annual one. “If you have a very sophisticated engineer and you want to bring them in … then you can pay $100,000 a year for your H-1B visa,” Lutnick said Friday.

But the following day, White House Press Secretary Karoline Leavitt said the fee would apply only to new applicants, and that it would kick in during the next cycle.

“Those who already hold H-1B visas and are currently outside of the country right now will NOT be charged $100,000 to re-enter,” she wrote on X. “H-1B visa holders can leave and re-enter the country to the same extent as they normally would.”

The White House has said the visas have been “abused” to undercut American wages and outsource IT jobs. Companies are laying off U.S. workers and replacing them with cheaper foreign employees, the White House said. People on H-1B visas now account for 65% of the IT workforce in the U.S.

While the tech and finance giants that employ many H-1B visa holders can afford to pay sky-high fees to continue bringing in global talent, other companies in public service-related sectors may need to change their approach.

Kathleen Brooks, research director at investment broker XTB, said: “Although these companies [Amazon and Microsoft] have the money to afford the visas, other sectors who also rely on H-1B visas may struggle with future recruitment, for example the health care and education sectors.”