On Sept. 19, 2025, President Donald Trump signed an executive order, which took effect on Sept. 21, imposing a $100,000 fee on applicants to the H-1B visa program — an apparent continuation of the administration’s crackdown on immigration. The nonimmigrant visa is designed to allow employers to hire skilled foreign workers. To explain the new fee, the Trump administration argued that abuse of the program took jobs from domestic workers and therefore harmed American economic and national security. However, the hefty fee does nothing to address the core issues underlying the program. Instead, the new provisions disproportionately hurt various organizations and undermine American economic competitiveness.
The H-1B visa program is imperfect. Although Congress caps the number of H-1B visas at 85,000 a year, they are distributed through a lottery system, meaning the program does not prioritize applicants who can contribute the most to the economy. This is worsened by the bureaucratic barriers of the visa itself, which limit job mobility. Consequently, this prevents holders’ full participation in the labor market and reduces the wages of those in the program — and therefore everyone in the industry — by tying workers to employers. However, the negative effect of H-1B visas on American-born workers, as argued by the Trump administration, is unclear. Measurement issues make it difficult to assess the true impacts of the program. These issues include selection bias due to the concentrated number of H-1B workers in scientific, business, computer, and IT industries, limited data availability, and long time lags. Although there is no general consensus on the employment and wage results of H-1B visas, differing studies find that most negative impacts of the program are felt by foreign-born workers and result in no overall employment loss for native-born workers.
What is clear is the positive results we have seen from H-1B visas. Economic research on the subject widely finds that H-1B workers lead to more patents, meaning more business creation and survival. Looking at the 20 years from when the H-1B visa was created, economists have concluded that H-1B visas were responsible for 30 to 50 percent of productivity growth.
The H-1B visa program clearly needs reform to address allocation issues, strengthen workforce efficiency, and improve labor market outcomes. However, it does not need changes that discourage skilled immigration and economic growth as the Trump administration’s $100,000 fee does. Tech startups fear they will be unable to compete with large companies like OpenAI and Meta because of their inability to afford the fee, revealing the potentially detrimental consequences for smaller companies. Many will also be unable to fill crucial labor gaps: hospitals are concerned about physician shortages — which will worsen patient care and inflate healthcare costs — and K-12 schools, universities, and nonprofit organizations worry they will be unable to find teachers with specialized language skills and researchers.
A diverse coalition is currently suing the Trump administration over the added fee. The suit acts as the new fee’s first major legal challenge, asserting that the president lacks the authority to impose taxes or other requirements to generate revenue because that power is granted to Congress. Additionally, the plaintiffs argue that the Trump administration did not evaluate the fee under the “arbitrary and capricious” standard, which is the required regulatory process to implement the fee.
Outside of the United States, the new H-1B visa fee presents a golden opportunity for other countries that are actually looking to attract more foreign talent. China has opened more sectors to overseas investors, offered visa waivers for citizens from most European countries, and launched its new K visa that targets foreign science, technology, engineering, and math (STEM) graduates. Prime Minister Mark Carney of Canada has made it clear that he hopes to introduce measures to gain talent impacted by the H-1B visa fee hike. Despite immigration policy debates in the U.K., Britain’s Chancellor of the Exchequer — otherwise referred to as the chief finance minister — has also explicitly said to the press that “while President Trump announced late last week that it will make it harder to bring talent to the U.S., we want to make it easier to bring talent to the U.K.” By making it more difficult for skilled foreign workers to enter the United States, America is only hindering its own economic competitiveness.
By establishing this massive financial barrier for skilled foreign workers, the United States is sending a signal to the global community that it is no longer competing for the talent that has made our economy successful today. H-1B visas have their flaws, but they remain a crucial tool for sustaining America’s economic leadership and should not be discouraged through costly hurdles that promote inequalities.
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