Trump’s H-1B Visa Change: What to Know

For nearly four decades, the H-1B visa program has allowed U.S. employers to hire nonimmigrant foreign workers with specialized skills that are difficult to find in the domestic workforce. In fiscal year (FY) 2024, close to four hundred thousand H-1B visa applications were approved, the majority of which were for visa renewals. 

However, the H-1B program has long faced criticism over claims that it displaces American workers and suppresses wages. Citing this, President Donald Trump announced in late September a significant increase to the fee that employers must pay for new H-1B petitions. Some experts warn this change could harm the U.S. economy, undermine competitiveness with China, and drive highly skilled talent to other countries.

Why did Trump impose a new $100,000 fee for H-1B petitions? 

The Trump administration has contended that the H-1B program undermines the president’s “America First” agenda, which seeks to prioritize American workers over foreign labor. On September 19, Trump announced a new policy requiring employers to pay a one-time $100,000 fee for new H-1B petitions filed on or after September 21, effective for one year. Previously, fees typically ranged from approximately $2,000–$5,000 per application, depending on the size of the company applying for the visa. Trump’s proclamation said there had been “systemic abuse” of the program, and that it undermined U.S. economic and national security by undercutting American wages and outsourcing tech jobs. (The new plan includes a provision for a “national interest” exemption on a case-by-case basis.)  

The Trump administration also proposed [PDF] overhauling the existing H-1B lottery system with a weighted process that would favor higher skilled and higher paid foreign workers. The change, according to the Department of Homeland Security, would disincentivize employers from using the program to “fill lower paid or lower skilled positions.” 

These actions are in line with the administration’s broader trade agenda to prioritize American businesses and workers while curbing foreign competition, including by implementing tighter restrictions on legal immigration to the United States. However, experts say the dramatic H-1B fee increase could ultimately harm the economy by turning away highly skilled foreign talent. 

What is an H-1B visa? 

Established by the Immigration Act of 1990, the H-1B program allows employers to temporarily hire foreign professionals in “specialized occupations” that require at least a bachelor’s degree or the equivalent. According to the immigration advocacy group FWD.us, there are currently as many as 730,000 H-1B visa holders living in the United States, along with an additional 550,000 dependents, including spouses and children.

At the time it was created, the H-1B program was intended to address critical labor shortages in fields such as science, health care, and technology. There is a cap of sixty-five thousand applicants per year, with an additional twenty thousand slots reserved for those with advanced degrees from U.S. institutions. If applications exceed the cap, as they often do, the government uses a lottery system to randomly select eligible applicants. The visa lasts three years and can typically be extended for a maximum of six years. 

The H-1B visa is one of several temporary worker visa categories, according to U.S. Citizenship and Immigration Services (USCIS). It is also one of the most contentious. Critics, notably labor groups, have long argued that it leads to competition between domestic and foreign workers, allowing companies to save money by paying foreigners less.  

However, proponents say the program is necessary to make up for shortages of qualified domestic applicants—particularly those with advanced technical degrees—in critical fields. “There’s always been a reasonable consensus that highly skilled immigration is good for the United States,” CFR trade and immigration expert Edward Alden said, highlighting the long-standing bipartisan support for programs like H-1B. 

How many H-1B petitions are approved each year?

In FY 2024, USCIS approved 399,395 H-1B petitions [PDF], a 3 percent increase from the previous year, which included both first-time and renewal petitions. (An approval gives an employer permission to hire the foreign worker for the position outlined in the petition.) Although the H-1B visa is subject to an annual cap, there are also exemptions for several industries, including universities and their affiliated institutions, nonprofit research organizations, and government research organizations.  

Indian nationals made up the largest share of H-1B approvals in FY 2024—71 percent [PDF] of the total—followed by Chinese nationals at approximately 12 percent. 

What effect might the H-1B visa fee increase have on the U.S. economy? 

Some economists fear that the high visa fee will slow the U.S. economy. German investment bank Berenberg lowered their 2025 estimate for U.S. economic growth from 2 percent at the start of the year to 1.5 percent following Trump’s September announcement.  

The loss of high-skilled immigrants and possible brain drain—as the new fee could force international students studying at U.S. colleges and universities to return home after graduating—could have a “chilling effect” on science and technology industries, said Manjari Chatterjee Miller, CFR senior fellow for India, Pakistan and South Asia. (The administration’s immigration policies have already made it difficult for international students to study in the United States.) H-1B visa workers in these critical industries have historically allowed the United States to outpace China and other countries in science and technological advancement, she added. An analysis by JPMorgan Chase economists found that the new $100,000 fee could risk cutting up to 5,500 work permits per month.  

Major tech company leaders have voiced support for the overhaul of the lottery system and the fee increase, though support has primarily come from those with firms that can afford the higher costs. However, investors have argued the fee could hurt innovation in the long run and spur larger companies to offshore their operations abroad. Start-ups unable to pay the fee will ultimately fail to compete with larger tech companies, who employ the largest share of H-1B visa holders.  

The American Medical Association also criticized the changes, arguing the health-care workforce relies on foreign physicians because the United States faces a doctor shortage. Rural areas could be especially affected: H-1B visa holders make up the highest percentage of employed physicians in Iowa, North Dakota, and West Virginia. 

The fee hike is not the only factor that could make the United States less attractive to foreign talent, with many immigrants worrying about travel in and out of the country under the Trump administration. “I think we’re at a tipping point,” Alden said. “You put all these things together, and a lot of smart, young foreign students are just going to say it’s just not worth the risk [to work in the United States] anymore.”  

Two weeks after Trump’s announcement, a coalition of unions, universities, health-care workers, and religious groups filed a lawsuit against the proclamation, calling it unlawful and “devastating” to essential U.S. services. 

How are other countries responding? 

CFR’s Alden and Miller both agreed that Trump’s proposed policy could drive a deeper wedge between the United States and India, whose technology industries have built a decades-long symbiotic relationship. U.S.-India relations had already soured after Trump imposed punitive tariffs on New Delhi earlier this year.  

India’s foreign ministry said in a statement that the new visa restrictions could have “humanitarian consequences” by disrupting families’ income sources. (According to the Reserve Bank of India, remittances sent back from the Indian diaspora worldwide stood at around $135 billion in 2024.) Nasscom, an Indian nongovernmental trade association, said in a statement that the new fee could have “ripple effects” on U.S. innovation and the wider job economy. 

Meanwhile, as highly skilled immigrants face few options in the United States, other countries have opened their doors to attract foreign talent. Last year, Germany increased the number of visas granted to skilled Indian workers from twenty thousand to ninety thousand. On October 1, China launched its new K visa, which offers graduates in science, technology, engineering, and mathematics work authorization without a job offer. Several other countries, including Canada, South Korea, and the United Kingdom, are also exploring options to attract the highly skilled labor market that Trump’s proposed policy could create. 

What other visa categories could be at risk? 

While changes to the H-1B visa are underway, other programs could also be targets for reform. Project 2025—a policy agenda published by the conservative Heritage Foundation whose recommendations have been largely embraced by the Trump administration—calls for capping and winding down the H-2A and H-2B visas over the next ten to twenty years. These visas allow U.S. employers to hire foreign nationals for temporary or seasonal agricultural work (H-2A) or nonagricultural work (H-2B). Although experts say they are essential for U.S. industries facing temporary labor shortages, such as hospitality and construction, they have also faced criticism for enabling the exploitation of foreign workers. 

Alden said these proposals signal a broader rethinking of the U.S. visa system—one that prioritizes high-income immigration while scaling back programs for lower-wage labor. In September, for example, the Trump administration introduced a new “Gold Card” visa program that allows wealthy foreign nationals to fast-track their path to U.S. permanent residency by making a major financial contribution to the U.S. government.

Austin Steinhart and Vasily Belousov helped create the graphics for this article.