Who Pays for Trump’s H-1B Visa Fee Hike? The Triple Shock: Corporate Costs, Labor Chaos, Innovation at Risk

TradingKey - Citing the need to "protect American workers," President Donald Trump has signed a new executive order overhauling the H-1B visa program, raising application fees from around $5,000 to $100,000 per visa — sending shockwaves through U.S. corporations. Critics warn this “worker-first” policy may not only fail to protect domestic jobs but could also undermine America’s innovation edge and economic efficiency.

Signed on September 19, the executive order increases the cost for companies sponsoring H-1B visas from just over $5,000 (including a $215 lottery fee and base filing costs, excluding legal fees) to $100,000, aiming to protect American workers.

The White House argues that lower-paid foreign workers are displacing U.S. employees and suppressing wages — a trend it now labels a national security threat. 

Commerce Secretary Lutnick said the higher fees are designed to ensure companies hire Americans and that only the world’s top talent enters the U.S.

This MAGA-aligned policy is straightforward in intent, but its real-world impact is widely questioned — particularly its effect on the U.S. tech industry, which heavily relies on H-1B visas, potential labor market distortions, and whether it truly benefits American workers.

What Is the H-1B Visa?

The H-1B is a non-immigrant work visa allowing U.S. employers to temporarily hire foreign professionals in specialized fields such as engineering, science, and IT. The application fee is typically paid by the employer sponsoring the worker.

It’s a primary pathway for high-skilled talent to enter the U.S., with major users including Amazon, Microsoft, Meta, Apple, Google, and JPMorgan Chase.

In the first half of 2025 alone:

• Amazon received 10,044 H-1B approvals
• Companies with over 5,000 approvals include Tata Consultancy Services (5,505), Microsoft (5,189), and Meta (5,123)

Corporate Chaos Ensues

The massive fee hike forces companies to reevaluate the cost-benefit of hiring foreign talent. Based on last year’s issuance of 141,000 H-1B visas, U.S. firms could face over $14 billion in annual “visa taxes.”

Companies like Microsoft and Amazon have urgently notified H-1B holders to return to the U.S., warning of operational disruptions.

Last weekend, a rush of returning employees caused airport chaos. The White House quickly clarified that the new rule applies only to the visa lottery starting February 2026, not retroactively.

Undermining America’s Innovation Edge

Given that about two-thirds of H-1B holders work in IT-related roles (as of 2023), organizations supporting tech innovation, such as the Chamber of Progress, argue the policy will deter many companies — especially startups and smaller firms — from using the H-1B program.

This, they warn, will make it harder for the U.S. to compete with China in developing critical technologies like AI.

Adam Kovacevich, head of the Chamber, questioned whether the government would eventually realize this policy contradicts its goal of winning the AI race.

Top tech incubator Y Combinator called the move a “mistake” that harms U.S. startups while giving a boost to overseas tech hubs like Vancouver and Toronto.

Uncertain Impact on American Workers

Michael Clemens, economist at George Mason University, argues that H-1B workers bring innovation, entrepreneurship, and R&D investment, boosting overall productivity and creating more jobs and higher wages for American workers across skill levels.

Many economists agree: H-1B workers complement rather than replace native workers.

This view directly contradicts the White House’s justification. While raising the H-1B barrier might appear to open up job opportunities for U.S.-born workers, American companies may not respond as intended.

Research shows that when H-1B access is restricted, multinational firms often shift jobs overseas.

Reuters notes two likely corporate responses:

• Accelerate offshoring — expanding operations in countries like India, the Philippines, or Mexico
• Boost AI adoption — using automation to fill talent gaps, potentially undermining the very unemployment problem the policy aims to solve

Kirk Doran, economist at Notre Dame, added that the sudden policy change could cause massive labor market dislocation. Companies relying on H-1B workers may face large-scale vacancies, and even if enough local workers exist, they won’t instantly relocate. When shocks hit without adjustment time, the labor market suffers trauma.

Reuters concludes that he U.S. has long thrived on a mix of domestic and global talent. If anti-immigration sentiment becomes permanent policy, the cost to America’s economy and competitiveness could be severe.