American businesses, particularly in tech, now face the near certainty of sharply higher costs for bringing highly skilled workers to the United States, after President Trump abruptly announced a $100,000 fee for each H-1B visa.
To be clear, that is $100,000 per H-1B worker. For perspective, according to CNN, Amazon, which employs 10,000 H-1B workers, would pay an additional $1 billion for those visas.
The Trump administration says the move will provide certainty to companies that want to bring high-skilled workers to the United States. White House spokesperson Taylor Rogers said it offers “certainty to American businesses who actually want to bring high-skilled workers to our great country but have been trampled on by abuses of the system.”
Not quite. Uncertainty still swirls around the action. Economists and business leaders argue that instead of bringing more jobs onshore and improving competitiveness, the new fee structure could have the opposite effect.
The high costs now associated with H-1B visas could further restrict U.S. companies’ access to talent, not only in technology but also in sectors such as banking, medicine, and higher education, including professors and researchers. Before the announcement, the flawed program required companies to cover legal and administrative expenses for each application, and it already faced criticism for being too limited because the federal government capped it at 65,000 slots annually, with another 20,000 in reserve. With such high fees, companies that need highly skilled workers may decide to send some jobs offshore to obtain talent at a more affordable price.
That risk is particularly concerning as AI reshapes businesses and economies and increases demand for specialized skills. If foreign talent becomes too expensive to procure, U.S. companies, and the country as a whole, could fall behind global competitors.
Gordon Hanson, Peter Wertheim Professor in Urban Policy and Academic Dean for Strategy and Engagement at Harvard Kennedy School, recently told Economic Times that levies on H-1B visas would make it difficult, if not impossible, to counter China’s technological rise. “This is because the U.S. innovation ecosystem thrives on having innovative companies, the best research universities in the world and the ability to attract the finest global talent, we are now systematically going about undermining those three pillars,” he said. “The Trump administration has also dramatically reduced funding for research, which directly affects our universities. Now, putting high fees on H-1B visas will impede America’s ability to attract or compete for global talent.”
Forrester predicts IT service delivery costs will rise, and that innovation and complex projects will suffer. The firm expects a shift from offshore to onsite delivery toward more remote-oriented models. It also expects increased investment in AI delivery platforms that automate parts of the software delivery lifecycle, and continued adoption of value-aligned pricing strategies.
There is a chance the levies could work as intended, prompting more local hiring and curbing abuses of the visa system. If so, organizations may strengthen programs for skilling, reskilling, and upskilling to preserve their brain trust rather than leaving skills development to chance.
Do not panic yet, although preparation is wise. Changes to the H-1B program will likely face frequent and vigorous legal challenges. There is already talk that tech companies in particular may eventually seek exemptions, which the proclamation allows through Homeland Security Secretary Kristi Noem.
Given the administration’s reputation for rewarding allies and penalizing opponents in politics and business, relying on exemptions is not a comfortable, or stable, strategy.