Startup Founders Say Trump’s $100K H-1B Fee Is A ‘Talent Tariff’ That Will Hurt Innovation
When news broke that startup founders say Trump’s $100K H-1B fee is a ‘talent tariff’ that will hurt innovation, the reaction across the tech industry was swift. Many entrepreneurs argue the drastic visa cost increase could cripple their ability to recruit global talent, tilting the playing field in favor of Big Tech.
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Amr Awadallah, founder of AI startup Vectara, summed it up bluntly: “I can’t afford to pay $100,000.” His company currently employs one H-1B worker, and while the new rule applies only to fresh applications, he believes the steep price will freeze out smaller startups.
What The $100K H-1B Fee Means For Startups
The H-1B visa was designed to help U.S. companies bring in highly skilled workers, especially in tech and engineering. For years, the application cost ranged from $2,000–$5,000.
But under the new policy announced by President Trump, that fee will now skyrocket to $100,000 per application. For large corporations, this may be a hit they can absorb. For early-stage startups, however, it’s a near-impossible barrier.
“This is a talent tariff,” Awadallah warned. “It will impact innovation in very, very negative ways long term.”
Why Founders Call It A ‘Talent Tariff’
Critics say the policy undercuts America’s ability to remain a hub for innovation. Many of the world’s top executives once held H-1B visas, including Google’s Sundar Pichai, Microsoft’s Satya Nadella, and even Elon Musk.
Unlike the O-1 visa for “extraordinary ability,” the H-1B has historically been more accessible. It has also provided a faster route than applying for a green card. The new $100K fee could erase that pathway for startups relying on diverse, global talent.
Big Tech Vs. Startups: A Growing Divide
The concern isn’t just about cost—it’s about competition. Big Tech companies with deep pockets can still afford the fee. Startups, on the other hand, may be forced to stop hiring internationally, giving corporate giants even more of an edge.
“This move will widen the gap,” Awadallah said. “Startups drive innovation, but if they can’t hire the people they need, the whole ecosystem suffers.”
The Bigger Immigration Picture
Immigration has long been a cornerstone issue for Trump. Dating back to his 2016 campaign, he accused companies of abusing the H-1B system to take jobs from U.S. workers. Supporters of the new policy argue it will protect domestic talent.
But opponents warn that restricting global hiring will backfire. By pricing out startups, the U.S. risks losing the very entrepreneurs and engineers who might build the next Google or Microsoft.
What’s Next For Innovation In America?
As March approaches—the next window for H-1B applications—founders are scrambling to rethink hiring strategies. Some are considering remote-first models, while others are weighing expansion outside the U.S.
What remains clear is this: startup founders say Trump’s $100K H-1B fee is a ‘talent tariff’ that will hurt innovation, and the long-term consequences could reshape America’s place in the global tech race.
