Donald Trump, true to form, just rolled out a surprise new federal policy -- which then caused immediate chaos for those affected by it. There was no warning and it took effect almost before the ink was dry, which created the immediacy. The White House then had to go through several iterations of what exactly it all was going to mean before that immediate chaos subsided somewhat. But the long-term effects of Trump's new H-1B visa policy could end up being rather significant. This could wind up being good news, but it could also wind up being no more than chaotic and counterproductive to Trump's own goals.

At the end of last week, Trump suddenly announced that H-1B visa holders (or their employers) were now going to be charged a $100,000 annual fee for the visa. The new rule was set to go into effect over the weekend. The language used was incredibly vague, which was what required the White House to adjust their policy on the fly (after chaos ensued).

The first thing that was unclear was whether the new fee would apply to current visa holders or not. Because a visa is required for entry into the United States, this set off a panic among H-1B visa holders who were currently vacationing or otherwise travelling elsewhere in the world. Here's just one anecdotal story of this panic:

A New York-based Indian software engineer on an H-1B visa was vacationing in Portugal when a friend called him with the news. The 34-year-old took the first flight back, even though it cost almost $5,000. "I'd rather be safe than sorry," he said, speaking on the condition of anonymity because he was afraid of jeopardizing his legal status.

Even if what everyone assumed from what Trump said during the rollout was true (that it would indeed apply to current visa holders), this could easily have been avoided if the new policy had been unveiled even a week before it took effect -- instead of the implementation deadline being measured in mere hours.

That was the first clarification: that current visa holders wouldn't be charged this fee. The second clarification was another walkback of what the initial policy was, as specifically laid out by the Commerce secretary during Trump's big announcement. He said the fee would be charged "per year" -- he even repeated that phrase and stressed it. Later, the White House announced that it was now going to only be a one-time fee, for new recipients of the H-1B visa. That's where things stand now, but with Captain Chaos in the White House who knows if further clarifications will be in store?

Looking past the botched rollout though, I have to wonder if this is going to wind up being a good thing or a bad thing. Full disclosure: in a previous phase of my life, I worked for tech companies in Silicon Valley. I have seen firsthand how the H-1B visa program, which was begun in 1990, changed the playing field of which people the tech companies employed. So I do have personal experience with the program.

There are a couple big problems with the H-1B visa program, all of which started almost immediately after it was implemented. The rationale at the time (when it was first discussed and then enacted into law) was that certain industries had to attract more specialized talent than the American workforce could provide. Jobs that required a bachelor's degree, at least -- that was the initial promise from employers. They wouldn't be taking American jobs, since fewer Americans were qualified for the openings than there were jobs. And they wouldn't be lowering the pay scale for American workers, since tabs would be kept on what these people were being paid. Those were the promises.

The first and biggest flaw of the program is that it created a modern-day "indentured servitude." To get an H-1B visa required a joint application from both the person requesting the visa and the company he or she was going to work for. The visa was tied to that employer. If the visa holder wanted to change jobs, they had to go back to the beginning and apply all over again for another H-1B visa, with the new employer. They weren't portable in any way. If they lost their job, they could only stay in the country an additional 60 days, period.

This means that H-1B visa holders -- unlike all other workers in Silicon Valley or any other affected industry -- effectively can't leave their jobs. They can't accept an offer of a better job with a different company, which is the biggest power employees have in a cut-throat industry like high tech. It was far easier (speaking as an American citizen) for a tech employee to just jump ship (accept a competing offer from the company across the street) to get more pay, rather than trying to get a raise from your current employer. But H-1B visa holders don't have this option. They are tied to their company. If they quit, they'd have to leave America, or quickly find another company to sponsor them for another visa.

The second biggest flaw in the program is the fiction that somehow the government is closely policing the pay scales of these workers, to ensure they were being paid a "prevailing wage" that is equal to what citizens doing the same jobs are making. That's never effectively happened, at least to my knowledge. So the companies can hire foreign workers cheaper than Americans, and those workers are tied to the company and can't jump ship no matter what the working conditions are like. That is not exactly the freest of marketplaces, you will note.

The third big flaw in the program is that it was initially supposed to provide high-level workers, not entry-level workers. That has never been policed either (to my knowledge, at least), and so tech companies hire tons of low-level entry workers and pay them less than they'd have to pay Americans fresh out of college. Which has led to the current situation:

American STEM graduates, led to believe their degrees would result in plentiful opportunities and well-paid jobs, are instead scrounging for work. The unemployment rates for physics, computer science and chemistry majors are far worse than those of college graduates overall -- and nearly double those of "what are you going to do with that degree?" graduates of art history and performing arts programs.

The number of new H-1B visas each year is limited to 85,000. In 2023, a whopping 446,000 people applied. The slots are handed out in a lottery system. Currently, however, people from India get a jaw-dropping 70 percent of the available visas. Tata Consultancy is one of the biggest employers who win H-1B visas in the lottery (it's always listed with other top companies like Apple and Microsoft). Tata Consultancy is a "middleman" operation in India which snaps up H-1B visa slots and then subcontracts their employees out to other companies in America (mostly high-tech companies). "Computer-related" jobs are almost two-thirds of all H-1B jobs.

So Trump's new policy is designed to change this playing field, and tilt it more in favor of American workers. Foreign workers will be put at a significant disadvantage, when a tech company decides which employee would be cheapest to hire. The initial plan -- to charge that $100,000 fee every year -- would seriously have tilted this field. But even a one-time application fee of that much will have to be figured in when the employers consider which job candidates to hire. H-1B visas are only good for three years, but can be extended for three more. One-sixth of 100 grand is $16,667 (assuming the company wants to keep the worker for the full period). That's not quite as big a tilt, when you consider how much high-tech workers make, but it does serve to make hiring Americans cheaper than hiring foreign workers. But to be fair, it is a gamble for the employer -- the employee could wind up being fired or otherwise leaving the job, and the fee has to be paid up-front (and is non-refundable). Therefore if the employee leaves within the first two years, the company will be out an extra $50,000 to $100,000 that they wouldn't have had to pay if they had hired some American kid fresh out of college. And that is a much bigger incentive.

However, there is one aspect of the new policy that might actually backfire (for Trump's overall goals). Because the tech industry pioneered the concept of "work from home." This now means that you can work anywhere that there is reliable internet service. Which doesn't just mean "at home in your house, here in America," but also "at home in India, or your home country." So the net result of the new visa fee might be tech companies deciding to not open up jobs in America, but rather increase their hiring in other countries. Which, obviously, is not what Trump wants to see (as it would mean job losses here as the companies outsourced them due to the high fee).

Tech titans haven't started publicly howling about the new policy yet, which is rather odd. They usually champion the H-1B visa program in a big and public way. This has gotten even some Trump confidants into trouble with the MAGA base -- most notably Vivek Ramaswamy and Elon Musk. But their influence over Trump has seriously waned, and the other tech titans are probably waiting to see what the final rules that are implemented turn out to be (there is already talk that some classes of jobs -- doctors, for instance -- might be exempted) before making any kind of big lobbying push. Trump's new policy is also designed to be a test of sorts, as it will be reviewed at the end of one year. Things could change, in other words.

There's also the question of how this will hit other industries -- such as the healthcare industry. Doctors and nurses from other countries will now be put at a disadvantage, which might exacerbate staffing problems among hospitals (rural ones in particular -- which is only going to accelerate as the gigantic Medicaid cuts start to be felt). But, as mentioned, some industries may wind up being exempted from the huge fee.

Ideally, this sort of policy shift would be examined by a committee in Congress, which would hear from experts and industry leaders and then come up with some sort of bipartisan plan to fix the problems which exist. Various options would be carefully considered, with any new fees studied and debated (rather than just a number being pulled out of thin air, with no clarity on whether it was even an annual fee or a one-time fee). After a consensus was reached, legislation could be drawn up and passed into law. But, of course, that's not how these things happen in the Trump era.

Donald Trump, as usual, has been all over the map on whether talented foreign workers are a good thing for America or not. At times, he seems to lean towards the big corporations who argue strongly in favor of retaining such talent in America. Trump at one point during the campaign said he was in favor of a "meritocracy" -- allowing in only professional foreign workers, while keeping out low-skilled workers. He even talked about "stapling a green card to the diploma" of any foreign student who graduated from an American university. He also (rather surprisingly) came out in favor of allowing in 600,000 higher-education students from China earlier this year. And this is one very big reason the tech titans have been so subservient to Trump, fawning over him and giving him gifts -- to convince him to continue to allow them to hire foreign workers. So we'll see how strict a policy this winds up being, after a few of these tech leaders talk to Trump behind closed doors.

There's one last abuse of the H-1B system worth mentioning here, and it actually is one that charging a whopping new $100,000 fee may wind up solving. There are a number of workers let into America on H-1B visas who are decidedly not highly-trained and highly-educated (as they are theoretically supposed to be). People like fashion models, for instance. Does anyone think America has some sort of shortage of beautiful women who aspire to be top models? Are there jobs going begging because no American fashion models apply for them? That's the only reason an H-1B visa should be handed out to a foreign model, of course. But that apparently didn't matter when Melanija Knavs moved to America in 1996, and got an H-1B visa (despite having already illegally worked here for a short period of time on her tourist visa). You may not recognize that name... but only because you know her better by the name she now goes by: Melania Trump.

-- Chris Weigant

Follow Chris on Twitter: @ChrisWeigant