Trump’s ‘America First’ and the H-1B Visa Cap

The recent announcement by the US Citizenship and Immigration Services (USCIS) that it has already received enough applications for H-1B visas to meet the Congressionally-mandated cap of 65,000 visas for the financial year 2020 took many by surprise and broke even more hearts. What is more surprising is that this statistic was for five days since USCIS started accepting applications for the H-1B visa.

Despite the stricter regulations, this year there has been a five per cent increase in applications over the previous year, which only goes to show that the US is still one of the most sought after destinations for work.

So, is H-1B visa cap good for the US and the world at large? No doubt that putting America first and focusing on the needs of only Americans could be good for Donald Trump to get popular with his citizens and pave the way for getting re-elected in the next term. However, we live in a globalised world where no country can function in isolation, especially a global superpower like the US. Any step taken by the US has a ripple effect on other countries. For example, the cap on the number of H-1B visas is already having a negative effect on tech firms like Cognizant, TCS, and Infosys. They are being forced to hire local talent, and it’s already taking a hit on their bottom line. What one does not understand is that in the long-term this could have an adverse effect on the US as well. As the input costs go up, so will the cost of output, which would adversely affect the end-user. Also, the cost advantage that these tech firms had would be gone and the very reason why the work was outsourced to them, would get nullified.

Trump’s ‘America first’ policy has surely ruffled many feathers on the global level. His protectionist measures like the H-1B visa cap along with other measures like his push for the Mexico wall and increased tariffs on imports to the US may be good for politics, but very bad for economics. For example, the US has already started a trade war with China. The recent move by the Trump government to terminate some duty-free benefits for imports from India is another example. Eventually, who will lose in the end? The end consumer who would be paying more for the same good on which import duties were increased.

One needs to understand that allowing free trade of goods, services and people between countries not only has economic benefits but other indirect benefits too. When people from different countries work together, they all become global citizens. They all learn from each other, learn about different cultures, and ultimately grow as individuals. Even at the corporate level, an organisation learns things that people from different countries practice back in their countries, which can sometimes help solve a problem better.

Thinking of your own people first is a good strategy, however, it is very myopic in its view. Let me draw a parallel with a parent-child relationship. Would it be a good idea if parents do not allow their child to play with other children just because s/he could get hurt? Would it be a good idea to make sure that their child goes to a university where only kids from their own country come to study? Would not these measures be counter-productive to the child’s development?

Similarly, instead of protecting its own citizens from competition from immigrants, Donald Trump should focus on making them more competitive; so competitive that companies are willing to hire only Americans even if they come at a higher price – just for the competitive edge they would bring to their organisations. This, my dear Americans, would really be the answer. Competition is always a good thing. It forces us to do our best.

Protectionism is nothing but the institutionalisation of economic failure. Time to think beyond short-term electoral gains…

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About the Author: Shobhika Puri

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