Trump's blows, first to trade and now to immigration, are blows to the very workings of the global economic system. US President Donald Trump, who first struck the global economy with trade wars, has now dealt a second blow: H-1B visas. Trump's first blow to the global economy was trade wars. While playing with tariffs, world trade suddenly shifted to "are we playing economic chess or bingo?" Uncertainty, risk, and plenty of chaos…
Last week, the second blow came: H-1B visas. Trump raised the application fee to a full $100,000! This means that to work in America, one now needs to buy an entry ticket with enough money to start a small business. More than 141,000 H-1B visas are issued each year. This means this decision will cost US companies $14 billion. This has alarmed financial firms, tech giants, and Silicon Valley. How could they not be alarmed? Companies have sent messages to their employees along the lines of, "Don't panic, but panic a little." Those who had left the country attempted to return hastily. Airports were locked. The White House was forced to declare, "Relax, this fee only applies to new applications."
Globalization has three pillars: the free movement of goods, capital, and people. Trump's blows, first to trade and now to immigration, are blows to the functioning of the global economic system. If he were to intervene in capital flows tomorrow, the entire architecture of globalization would be severely damaged. Fortunately, touching capital is too risky; for now, it's safe. Touching capital is prohibited, but not to immigrant workers. Yet, immigrants have always been one of the most important determinants of US competitiveness. Without immigrant workers, the US would neither be an industrial giant nor the center of the world economy.
The situation is no different today. Without immigrants, the US would not have a leading position in science and technology. But Trump's war on universities and now his decision on H-1B visas could change this. The importance of foreign-born engineers and researchers to Silicon Valley is immediately apparent when you look at the founders and CEOs of these companies. Elon Musk, for example, is one of them. India is the country that benefits most from H-1B visas (71 percent), followed by China (12 percent). In other words, this decision serves not only immigration policy but also geopolitical considerations: Trump, as usual, is seeking to "kill several birds with one stone."
Until now, anti-immigrant sentiment has been firmly rooted in the principle of "we are against illegal immigrants." But now that line has been crossed, and even skilled engineers are being targeted. Yet, at a time when the world's population is rapidly aging and shrinking, turning away even unskilled workers, let alone skilled ones, is unwise. The business world is aware of the situation and is seeking solutions to population pressure through immigrants. When the decision to raise work visa fees came in response to the largest illegal worker operation in history at a Hyundai factory, the conflict transcended a Democrat-Republican conflict and spread to Trump's base. While supporters defended the decision by claiming "this will encourage companies to hire Americans," tech executives issued harsh statements. The White House's statements to address the situation have failed to quell the criticism.
According to The Economist, if current demographic trends continue for another decade, the world population will peak at 9.6 billion in 2065 and then decline to 8.9 billion by 2100. The threat of depopulation also applies to the United States, where the fertility rate is 1.6. This rate is well below the replacement threshold of 2.1, which would stabilize the population. Government-implemented baby stimulus packages are insufficient to halt the decline in the fertility rate. These programs are failing to deliver results. The only realistic solution is immigration from countries where fertility rates remain high. Canada, the UK, Germany, and Australia have recognized this reality. They are implementing programs to address labor shortages in agriculture, tourism, construction, healthcare, and elder care.
Meanwhile, academic studies reveal that migrant workers suppress wages in their countries of origin. This fuels anti-immigrant sentiment within society, so much so that even those who previously immigrated often align themselves with native-born individuals on this issue. They may object to new immigrants because they could disrupt their own economic circumstances. Therefore, anti-immigrant sentiment is a complex field where class, social, and cultural codes intertwine. This field cannot tolerate populism. It must be managed properly. Otherwise, it is easy to lead to dire developments in terms of humanitarian, social, and economic dimensions.
