Trump's $100,000 H-1B visa fee risks US growth, analysts warn

WASHINGTON — A new $100,000 levy on skilled-worker visas introduced by President Donald Trump could slow US economic growth and raise the risk of a recession, analysts warned. The White House confirmed over the weekend the fee would apply immediately to every petition filed to hire a skilled worker from abroad under the H-1B program, a move aimed at reshaping how the United States sources talent in technology and other advanced fields.

Tech firms and other employers that rely on foreign talent face higher upfront costs as they petition for foreign workers, potentially chilling hiring and dampening productivity in the near term. The policy could also affect international enrollment and the trajectory of the labor force, as some students and professionals consider alternatives abroad.

Investment bank Berenberg cut its US growth forecast for this year from 2% to 1.5%, saying the new levy is part of a broader shift toward restrictive immigration policies that could slow output. Economist Atakan Bakiskan described the move as another instance of anti-growth policymaking and warned it could erode labor-force growth already near a standstill. “Deportation efforts, attempts to strip work permits from existing employees, and a hostile environment for foreign workers have already caused labor force growth in the US to nearly flatline,” he said. “With the new H1B policy, the labor force is more likely to shrink than expand going forward. The future of economic growth now depends almost exclusively on productivity gains. However, 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.” Bakiskan warned that even 1.5% growth “may soon look optimistic,” noting tail risks such as erosion of trust in institutions, higher long-term yields, tariffs and fiscal uncertainty could raise the chance of a financial crisis in the US. “Can the economy still grow with no job creation? Yes, but at a slower rate and with a higher risk of stagnation or recession.”

In a related development, Britain was reported to be weighing cuts to visa fees for skilled overseas workers as a part of a broader talent strategy. The Financial Times said Prime Minister Keir Starmer is considering reducing costs for a fast-track visa designed to facilitate settlement for top talent in science, engineering, humanities, medicine, digital technology, or culture and the arts. Britain’s global talent visa, introduced in 2020, costs £766 to apply, with associated fees for dependents, and carries an annual health surcharge. A total of 3,901 people were granted the visa in the year to June 2023, a 73% rise from the previous year. Neil Wilson, UK investor strategist at Saxo Markets, said the new US visa policy could prove tricky for technology and financial-services firms and weigh on their share prices later in the session, noting that Amazon alone employs about 14,000 people on H-1Bs. Victoria Scholar, head of investment at Interactive Investor, added that markets were already eyeing the fallout, with US futures trading modestly lower amid renewed scrutiny of immigration policy.

The developing stance on skilled immigration adds to a broader picture in which some analysts see productivity as the remaining engine of growth for the US. Bakiskan argued that while growth of about 1.5% may be achievable in the near term, substantial questions about the policy environment and talent mobility could constrain the economy for years. “The economy can still grow, but at a slower pace and with greater risk of stagnation or recession,” he said. Investors and policymakers will be watching how the administration balances immigration controls with the need to sustain innovation-driven growth, particularly in the tech sector where foreign talent has long played a central role.

As the implications unfold, market participants are weighing the long-term costs against short-term policy aims. If the United States experiences slower labor-force expansion and heightened talent constraints, economists say the productivity channel will be pivotal in determining whether growth stabilizes or slides further. The current trajectory suggests a deliberate recalibration of talent policy, with their effects rippling through hiring plans, venture funding, and the competitiveness of American tech firms on the global stage.