MAGA vs techies: Trump's H-1B dilemma exposes ideological fault lines

The H-1B visa debate pits MAGA hardliners against tech billionaires, revealing deep divisions over immigration and economic policy in Trump's incoming administration

The recent war of words over H-1B visas offers early signs of the unpredictable nature of the second Trump administration. The disagreement, played out over Elon Musk-owned X, pitted Donald Trump’s Make America Great Again (MAGA) hardliners against the tech billionaires who supported his re-election, led by Mr Musk and his billionaire colleague in the Department of Government Efficiency Vivek Ramaswamy. Ironically, the sparking point of this MAGA civil war was the criticism by anti-immigrant, anti-Islamic influencer Laura Loomer over Mr Trump’s appointment of Chennai-born Sriram Krishnan as an adviser on artificial intelligence policy in his administration.

 

Mr Krishnan favours bringing more skilled immigrants to the United States (US). Ms Loomer’s comment that this appointment was not in line with “America First” policies was endorsed by MAGA supporters, with posts that vied with one another for poor taste. They were endorsed by former United Nations ambassador, Indian-origin Nikki Haley, and Steve Bannon. Ms Loomer, for instance, referred to Indians, who account for over 70 per cent of H-1B visas, as “invaders. This campaign was countered by Mr Ramaswamy, who blamed American culture for “privileging mediocrity” as a reason US firms hired skilled workers from other countries. On his part, Mr Musk, originally an H-1B visa entrant from South Africa, spoke of the programme attracting the top 0.1 per cent of engineering talent. The bitter war of words has been tamped for now with the President-elect specifying that he had “always liked” the H-1B visa programme.

 

This endorsement should not, however, allay the Indian tech industry’s fears. For one, it is unclear whether Mr Trump’s statement is driven by a genuine understanding of the issue at hand or an attempt to placate the powerful tech-industry bosses, the erstwhile critics who chose to massively bankroll his campaign this time. Contrary to his laudatory comments over the weekend, Mr Trump had described such visas as “very bad” and “unfair” during his first term. In 2017, he signed the “Buy American, Hire American” executive order, which resulted in a sharp uptick in the denial and delays of H-1B petitions since 2015. In 2020, the Trump administration required employers to pay H-1B holders higher wages to discourage US companies from turning to cheaper labour from abroad.

 

These moves suggest a basic misunderstanding of the utility of H-1B visas among MAGA adherents. Studies of the economic contributions of H1-B visa workers show that unemployment rates are relatively low in occupations that employ large numbers of H-1B workers. Another recent study found increasing restrictions on H-1B visas decreases the number of jobs corporations offer in the US in favour of affiliates in Canada, China, or India. Evidence also suggests that H-1B visa holders do not drag down wages — their median wages are more than double those of US workers in general. The problem is that in MAGA lore the H1-B visa issue is often confused with illegal immigration, which is perceived to be stealing American jobs at the bottom of the pyramid. This current spat signals similar ideological tensions over economic policy within the incoming administration. Tensions over China and tariffs could well be next. But for the tech mavens in the incoming administration, the challenge may be to make Mr Trump understand how H-1B visa holders have helped make America great for decades.