Donald Trump’s recent proclamation introducing a substantial $100,000 application fee for H-1B visas has sparked significant concern among economists regarding its potential impact on U.S. economic growth. The new fee, which is approximately 60 times the current cost, aims to motivate companies to prioritize hiring American workers. However, analysts argue that this move could have adverse effects, especially on the technology sector, which heavily relies on these visas to recruit skilled foreign workers, particularly from India.
Atakan Bakiskan, an economist at the investment bank Berenberg, characterized the fee as an example of the current administration’s “anti-growth policymaking.” He emphasized that the high cost of attracting foreign talent would lead to a brain drain and hinder productivity. Bakiskan cautioned that losing skilled workers, especially international students who may feel compelled to leave after graduation, could have long-lasting repercussions for the economy. In light of this policy shift, Berenberg has downgraded its U.S. economic growth forecast from 2% to 1.5%, with Bakiskan warning that the forecast could prove overly optimistic if current trends continue.
Further illustrating the potential ramifications, Bakiskan pointed to broader issues such as a decline in trust in institutions, pervasive uncertainty, and unsustainable fiscal policies, all of which could elevate the risk of a financial crisis in the U.S. in the long run. This sentiment was echoed by Deutsche Bank’s market strategist Jim Reid, who noted that the announcement had rapidly created uncertainty for companies dependent on H-1B visas.
Chaos ensued in the tech industry following Trump’s announcement, prompting some Silicon Valley firms to advise employees against international travel. In response, the White House clarified that the higher fee would only apply to new applicants, and it would be a one-off payment, aiming to mitigate some of the confusion.
Kathleen Brooks, research director at broker XTB, highlighted that major tech players like Amazon and Microsoft, both heavy users of H-1B visas, could absorb the increased costs. However, other sectors, particularly healthcare and education, may struggle to recruit talent in the face of the new fee structure. In 2025 alone, Amazon reportedly had more than 10,000 H-1B visas approved, while both Microsoft and Meta Platforms had over 5,000 approvals each.
The H-1B visa program grants a total of 65,000 visas annually to employers seeking to hire temporary foreign workers in specialized roles, plus an additional 20,000 for those with advanced degrees. India has been the largest recipient of these visas, with a staggering 71% of approvals last year. In reaction to the announcement, India’s commerce minister, Piyush Goyal, expressed strong disapproval, emphasizing the potential humanitarian consequences of the new fee structure and suggesting that it reflects a desire to limit the inflow of talent from India.
The repercussions of this policy have also been felt in Indian markets, as share prices for major technology firms like Infosys and Tata Consultancy Services dropped about 3% following the news, which could signify deeper concerns about the operational challenges that arise from reliance on the H-1B visa program.
