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--:-- Jessica Mendoza: Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Wednesday, September 24th.
--:-- Jessica Mendoza: Last Friday, the Trump administration unveiled a dramatic overhaul of a key work visa program, announcing a huge increase in cost for the H-1B visa. What this proclamation will do is raise the fee that companies pay to sponsor H-1B applicants to $100,000.
--:-- Jessica Mendoza: The H-1B program allows U.S. companies to hire highly skilled foreign workers. And the administration says the goal of this change is to open up more jobs for American citizens. We need workers. We need great workers. And this pretty much ensures that that's what's going to happen.
--:-- Jessica Mendoza: The announcement was unexpected. And right away, it caused a lot of chaos and confusion. The proclamation the president put out late Friday said that this new policy would take effect at 12.01 a.m. Eastern Time Sunday.
--:-- Jessica Mendoza: That's our colleague Amrith Ramkumar. So you basically had a little more than 24 hours to get back to the U.S. if you were somewhere else.
--:-- Amrith Ramkumar: Immediately, there were concerns that H-1B visa holders traveling abroad would have to pay a huge fee to reenter the U.S. And some lawyers started encouraging people to come back to the States. If you're traveling abroad and you're on an H-1B visa, you better come back ASAP. This is urgent, time sensitive.
--:-- Amrith Ramkumar: If you have a brother, a sister, a best friend, they need to book their flights now and come back immediately. In some cases, folks rush to change their plans mid-travel.
--:-- Amrith Ramkumar: I'm so mad and frustrated right now because me and my wife, we were planning to go to Korea tomorrow for my sister's wedding.
--:-- Amrith Ramkumar: Several Indian passengers disembarked mid-boarding from an Emirates flight to India, leading to chaos at the San Francisco International Airport.
--:-- Amrith Ramkumar: And because most H-1B visa holders work for tech companies, the sudden change ignited a firestorm across Silicon Valley.
--:-- Amrith Ramkumar: The immediate reaction was pure panic. The state of play is still changing as we're discussing this today. So this idea that it's not resolved and you don't know how your company is going to end up handling it is really tough for a lot of people.
--:-- Jessica Mendoza: Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza.
--:-- Jessica Mendoza: Coming up on the show, inside Trump's chaotic overhaul of the H-1B visa.
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--:-- Jessica Mendoza: So Amrit, what is an H-1B visa?
--:-- Amrith Ramkumar: So the program was created in 1990 as a way to bring in talented people from overseas. The idea being you pay a few thousand dollars to go through the process and then you get to be here for three years and you can renew once and that's another three years.
--:-- Amrith Ramkumar: Sponsoring employers have typically paid $5,000 to $10,000 in government fees, not including the cost of legal work to prepare the application. And not everyone who applies for an H visa gets one There a lottery system So that been used for a long time and in recent years it definitely taken off
--:-- Amrith Ramkumar: The big tech companies have used it a lot. What is it that makes it so popular in the tech world?
--:-- Amrith Ramkumar: These companies have a hard time filling all the jobs they need to, and any time they can find different sources of labor, they're going to take advantage of it.
--:-- Amrith Ramkumar: So that's been a huge boon in some ways to them and been part of what has made the tech sector so successful, a lot of people say.
--:-- Jessica Mendoza: And so why is the Trump administration changing it now?
--:-- Amrith Ramkumar: The Trump administration sees this as a symbol of everything that's wrong with the current immigration system and how corporate America hires people. They see it as a way companies have gotten around hiring American workers.
--:-- Amrith Ramkumar: They think it's part of this push for years and decades to go overseas for everything, right? to push business overseas, to hire people from overseas, and sort of neglect people who were born here and sort of deserve these jobs.
--:-- Amrith Ramkumar: So they see that as fundamentally unfair, and they think cracking down on it can help push companies to hire more American workers without disrupting things too much in the tech sector.
--:-- Jessica Mendoza: Whose idea was it to focus on the H-1B visa?
--:-- Amrith Ramkumar: In this case, it was mostly Commerce Secretary Howard Lutnick.
--:-- Amrith Ramkumar: If you're going to train somebody, you're going to train one of the recent graduates from one of the great universities across our land. Train Americans, stop bringing in people to take our jobs.
--:-- Amrith Ramkumar: Why would the Secretary of Commerce be leading the charge on immigration policy?
--:-- Amrith Ramkumar: It is very unusual for the Commerce Secretary to be driving a big chunk of immigration policy in this way. Normally, you would expect Department of Homeland Security, which oversees all the immigration aspects and maybe even Department of Labor, to be heavily involved.
--:-- Amrith Ramkumar: And those departments were listed in the proclamation that the administration put out. You have to understand the Commerce Secretary to understand this policy and how it fits into the bigger picture.
--:-- Amrith Ramkumar: So he's the one championing all of the revenue-raising ideas. Lutnick is a former investment banker. And since joining the Trump administration, he's been a big promoter of all kinds of programs that could bring money into the government.
--:-- Amrith Ramkumar: And so that's sort of how he and the president view the world, right? Everything is a potential deal to be made.
--:-- Amrith Ramkumar: And immigration policy and the H-1B visa is no different. So anytime they can raise some money and they feel like they have companies in a tough spot where they have leverage and they can ask for another $100,000 or a million dollars or even a billion dollars, they're going to do it.
--:-- Amrith Ramkumar: Lutnik's biggest idea for monetizing immigration is a project called the Gold Card. The idea is to provide a path to citizenship for foreigners willing to pay a million dollars.
--:-- Amrith Ramkumar: But the Gold Card wasn't well received by some Trump allies. They saw it as a pay-for-play scheme that didn't really restrict immigration.
--:-- Amrith Ramkumar: So Lutnik brought forward a new idea, a $100,000 H-1B visa fee.
--:-- Amrith Ramkumar: So going into Friday, no one, as far as we can tell, really knew that this was going to happen. Even a lot of the people in the administration had no idea this was going to be rolled out late on a Friday.
--:-- Amrith Ramkumar: And then the proclamation goes out. But it was mass confusion from the beginning because the Commerce Secretary made it sound like it would be an annual fee and apply to existing visa holders.
--:-- Amrith Ramkumar: and the language in the proclamation that went out early Friday evening publicly was a bit vague and hard for people to decipher.
--:-- Amrith Ramkumar: For instance, the proclamation said that the entry of foreigners into the U.S. under the H-1B program, quote, is restricted effective September 21st, without much further clarity.
--:-- Amrith Ramkumar: So some people and companies wondered if they would have to immediately pay $100,000, especially for visa holders re-entering the country.
--:-- Amrith Ramkumar: Others worried that they wouldn't be allowed back in at all.
--:-- Amrith Ramkumar: So within hours, you had these big tech companies that are pretty deliberate and don't always move that quickly, jumping into action to send out notes to all their staff.
--:-- Amrith Ramkumar: If you're on an H-1B visa, either get back to the country or stay here. And like, we don't know what's going to happen, but we'll be in touch with you, that kind of thing.
--:-- Amrith Ramkumar: So that was Friday evening. And then from what we can tell all these companies and tech trade groups and lawyers and others were trying to get more information because no one knew what was going on
--:-- Amrith Ramkumar: On Saturday, the day after the proclamation, the White House clarified matters. It said that the $100,000 fee would only apply to new H-1B visa applicants, and it would be a one-time payment, not an annual fee.
--:-- Amrith Ramkumar: But just the rapid walk back also confused people.
--:-- Amrith Ramkumar: And then we're told now that a lot of these discussions are still ongoing and that the Commerce Secretary still supports the fee being an annual payment, not a one-time payment.
--:-- Amrith Ramkumar: Even though the administration had already said that it is just a one-time payment.
--:-- Jessica Mendoza: Correct. So where we sit now is the mass panic from Friday, early Saturday has sort of subsided. But there's still a lot of uncertainty about where this is going to go next.
--:-- Jessica Mendoza: And we'll likely see legal challenges and all sorts of things coming too.
--:-- Jessica Mendoza: What this change in H-1B visas means for Silicon Valley? That's next. We'll be right back.
--:-- Jessica Mendoza: Series premiere Tuesday on NBC.
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--:-- Jessica Mendoza: How much does Silicon Valley rely on H-1B visas?
--:-- Amrith Ramkumar: Silicon Valley is hugely reliant on H-1B visas for hiring. They bring in thousands and thousands of people in some cases, depending on the company.
--:-- Amrith Ramkumar: And it's a huge source of talent and people overseas who really want to come to the U.S. and work hard and make a life here.
--:-- Amrith Ramkumar: Some of Silicon Valley's biggest names, including Elon Musk and Microsoft CEO Satya Nadella, have previously been on H-1B visas.
--:-- Amrith Ramkumar: Today, companies that sponsor the most H-1B visas include Amazon, Microsoft, and Meta.
--:-- Amrith Ramkumar: Amazon alone had more than 14,000 worker applications approved in the 2025 fiscal year.
--:-- Amrith Ramkumar: So it's sort of been a key driver of the tech boom in the past few decades that people have cited and something that's really accelerated innovation in a lot of cases.
--:-- Amrith Ramkumar: And that sort of melting pot concept has, again, accelerated a lot of things.
--:-- Jessica Mendoza: So what are some of the biggest tech companies saying about this? How would they be affected by this feat?
--:-- Amrith Ramkumar: Well, publicly, the companies are not saying anything because they're sort of scared of making the administration mad.
--:-- Amrith Ramkumar: And they're very careful at how they handle that relationship.
--:-- Amrith Ramkumar: And this is all based on our conversations with administration officials and executives at these tech companies and lobbyists and people at tech trade groups and people in immigration circles over the last few days.
--:-- Amrith Ramkumar: They have a lot of other ways to sort of find talent. But yeah, they also have to determine, do we want to get in a fight with the administration over this? and join potential lawsuits.
--:-- Jessica Mendoza: So from what we can tell, those are sort of the major questions now and trying to still figure out how this process will work internally, who's running point on it.
--:-- Jessica Mendoza: Is the fee set at one time or is it still potentially fluctuating after we go past a few months
--:-- Amrith Ramkumar: So there definitely a level of panic and anxiety there
--:-- Amrith Ramkumar: And you have had some people like OpenAI Sam Altman and NVIDIA's Jensen Huang, who are both very close to the president.
--:-- Amrith Ramkumar: They've said basically that they think it could be a fine policy because you're basically going to be bringing in a much higher caliber of worker and the companies will have to really support them and really value them to pay the fee.
--:-- Amrith Ramkumar: And they think that could be actually helpful in some ways.
--:-- Amrith Ramkumar: Here's Jensen Huang on CNBC earlier this week.
--:-- Amrith Ramkumar: So I think immigration is really important to our company and it's really important to our nation's future and I'm glad to see President Trump making the moves he's making.
--:-- Amrith Ramkumar: Sam Altman also supported the change in the same segment.
--:-- Amrith Ramkumar: We need to get the smartest people in the country and streamline that process and also sort of aligning financial incentives seems good to me.
--:-- Jessica Mendoza: While some big companies like NVIDIA and OpenAI are cautiously optimistic, Amrit says smaller startups are less likely to be able to afford that $100,000 fee, especially since they'd have to pay it for each employee.
--:-- Jessica Mendoza: How would this change impact the way some of these companies operate versus what they do now?
--:-- Amrith Ramkumar: It's a really good question, regardless of how this ends up. People have wanted to change the program for a long time, and they don't like the idea that you're bringing in cheaper talent from overseas generally.
--:-- Amrith Ramkumar: So I think people were already grappling with some of those questions and making changes to their hiring practices and sort of bracing for some of this.
--:-- Amrith Ramkumar: But I think a move like this only accelerates those discussions.
--:-- Jessica Mendoza: It's interesting, you know, the idea behind changing the H-1B visa program seems to be want this desire to get more American citizens into some of these high-paying, high-skill jobs.
--:-- Jessica Mendoza: I mean, are there American citizens that can fill these jobs at the rate that they need to be filled?
--:-- Amrith Ramkumar: People around the tech companies say the answer is generally no, right? Like that they do everything they can to get the talent that's here and they have to go overseas just because they're growing so quickly and they need, again, bodies to fill those jobs and there aren't enough they can find here.
--:-- Jessica Mendoza: There are already issues with getting talent in the tech sector. Does this make it even harder?
--:-- Amrith Ramkumar: Can other countries like the UK and others now take advantage of this and say, we're going to do a really friendly policy that is sort of the counter?
--:-- Amrith Ramkumar: So there are definitely lots of those questions swirling around.
--:-- Jessica Mendoza: We've seen a lot of big tech companies try to forge or strengthen their relationships with this administration.
--:-- Jessica Mendoza: Those executives were lined up behind him at the inauguration. Many of them have been to the White House in these meetings, thanking him at press conferences.
--:-- Jessica Mendoza: How, if at all, could this change in the H-1B visa program affect that relationship?
--:-- Amrith Ramkumar: Yeah, it's another example of this tension that keeps coming up, right? You have Trump and the big tech folks sort of playing nice and being super cozy together.
--:-- Amrith Ramkumar: In general, even if this change could be okay for them, most tech executives, honestly, if they were talking, would say the H-1B program has been a critical driver of growth in Silicon Valley over the past few decades.
--:-- Amrith Ramkumar: And it's definitely a tension point.
--:-- Amrith Ramkumar: And that's why, though, people think the administration is also starting to walk things back and might ultimately soften them.
--:-- Amrith Ramkumar: Because they also know they don't want to anger the tech companies too much because the tech companies are investing hundreds of billions of dollars in the U.S., if not more.
--:-- Amrith Ramkumar: I think the big takeaway is that Trump and his administration are caught between these two very strong forces.
--:-- Amrith Ramkumar: the MAGA base that wants to crack down on immigration, the MAGA base that's also very skeptical of AI, for example, and then the tech community that the administration is embracing that wants to bring in high-skilled people overseas without a ton of barriers.
--:-- Jessica Mendoza: Thank you. Thank you.
