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Donald Trump’s decision to impose a $100,000 (£74,096) fee on H1-B visas for skilled foreign workers could hurt US economic growth, economists have warned.
Trump signed a proclamation on Friday introducing the application fee for the H-1B visa, 60 times the current cost, in a move designed to encourage companies to hire more American workers.
The increase represents a blow to big tech companies, which rely heavily on such visas to hire engineers, scientists and coders from overseas, particularly India.
Atakan Bakiskan, an economist at the investment bank Berenberg, said the move was an example of the Trump administration’s “anti-growth policymaking”.
“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,” he added.
“Investments in artificial intelligence are unlikely to offset the damage caused by the loss of human capital under restrictive immigration policies.”
Berenberg recently lowered its estimate for US economic growth, from 2% at the start of the year to 1.5%. However, Bakiskan warned that, unless Trump relents, the 1.5% forecast “may soon look optimistic”.
He said: “Taken together, the erosion of trust in institutions, a loss of human capital, tariffs, chronic uncertainty, and unsustainable fiscal policies can raise the tail risk of a financial crisis in the US. In the long run, they may set a path for an even weaker dollar and higher long-term yields.”
A Deutsche Bank market strategist, Jim Reid, said the new application fee “caused a huge amount of uncertainty over the weekend for those that rely on it”.
Trump’s announcement on Friday triggered chaos in the tech industry, with some businesses in Silicon Valley urging staff not to travel outside the country. It prompted the White House to clarify on Saturday that the new higher fee applied only to new applicants and would be a one-off payment.
Kathleen Brooks, the research director at the broker XTB, said Amazon had the highest number of workers on H-1B visas, closely followed by Microsoft, the Facebook owner Meta, Apple and Google.
“Although these companies 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,” she said.
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In the first half of 2025, Amazon had more than 10,000 H-1B visas approved, while Microsoft and Meta Platforms had more than 5,000 approvals each.
The H-1B programme offers 65,000 visas annually to employers bringing in temporary foreign workers in specialised fields, with a further 20,000 visas for workers with advanced degrees.
India has been the biggest beneficiary of H-1B visas, accounting for 71% of approved visas last year. The Indian government hit back at the new fee for skilled workers, warning it would have “humanitarian consequences” by way of “disruption caused for families”.
On Sunday, India’s commerce minister, Piyush Goyal, said: “They are also a little afraid of our talent. We have no objection to that.”
On Monday, the share prices of the multibillion-dollar Indian tech groups Infosys and Tata Consulting Services fell by about 3% in response to the news. Both companies use the H1-B programme to deploy thousands of Indian workers to US clients.
