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Executive Order Triggers H-1B Jitters in Silicon Valley

By David Jones
Apr 19, 2017 9:50 AM PT
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President Donald Trump on Tuesday signed a long-anticipated executive order that addresses a campaign promise to begin shifting the country toward the "Buy American, Hire American" strategy that appealed to much of the industrial working class population in the Rust Belt states.

The order calls on the U.S. government to shift purchasing toward domestically produced goods. It also sets in motion a change in immigration policies, which could exclude many qualified foreign professionals from Silicon Valley firms.

Trump's speech and signing ceremony Tuesday afternoon followed his appearance at the Snap-On Tools headquarters in Wisconsin, a state he narrowly won despite its usual role as part of the Democratic Party's blue firewall in the upper Midwest.

"For too long we've watched as our factories have been closed and our jobs have been sent to other faraway lands," Trump told attendees at the event.

More than 70,000 U.S. factories have been lost since China joined the World Trade Organization, he noted.

End the Lottery

The executive order will end the practice that allowed "Buy American" programs to be circumvented by excessive waivers and endless exemptions, Trump said, noting that American workers have been losing out in an economic environment that has favored cheap, subsidized foreign goods.

Trump touched briefly on the H-1B visa issue during his speech, noting that visas are granted in a "totally random" lottery system, and saying that was the wrong approach.

"Instead, they should be given to the most-skilled and highest-paid applicants, and they should never, ever be used to replace Americans. No one can compete with American workers when they are given a fair and level playing field," he said.

If the present system is flawed, it's not clear what an effective replacement would look like, however.

"Large technology companies want more highly educated foreign candidates for H-1B, and many hope that a study would help them," said Peter Vogel, a partner in Gardere, Wynne Sewell.

Many potential candidates lose out in the current complex lottery system, he told the E-Commerce Times.

Best and Brightest

Many Silicon Valley firms hire workers from India through the H-1B visa program, and they recruit them directly when they complete their engineering studies at major American colleges and universities, noted Charles King, principal analyst at Pund-IT.

"One concern among IT vendors is that if the H-1B program is highly restricted, it would damage their ability to hire the 'best and the brightest' minds to their workforce, no matter what their country of origin," he told the E-Commerce Times.

Trump has made a wide range of statements about the program, King added, sparking concerns about its future funding, confusion over the actual implications of the executive order, and worries about the long-range implications for existing workers and their companies.

Call to Action

The Consumer Technology Association on Tuesday called on Congress to take immediate action to address visa and immigration reform. CTA President Gary Shapiro praised Trump for calling attention to abuses in the program, and said the program needs to focus more on merit.

Congress should take the lead by passing reforms that are "fair, effective and efficient," he urged. Legislators need to show leadership to help the technology industry support about 15 million American jobs and billions of dollars contributed to the U.S. economy.


David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.


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What's most likely to cost a company your customer loyalty?
a major product fail
major unethical corporate behavior
public advocacy of social or political views I oppose
a really bad customer service experience
stagnation -- I'm attracted to innovation
none of the above -- I'll stick through thick and thin