Bannon vs Musk: How Trump’s U-turn on H-1B visas has split MAGA | Donald Trump News

Days before Donald Trump is sworn in as president of the United States, a feud between his tech allies and champions of his far-right MAGA (Make America Great Again) agenda over H-1B visas has exploded.

Former White House adviser Steve Bannon accused Elon Musk of trying to establish “techno-feudalism on a global scale” in a fresh broadside against the billionaire businessman this week.

Bannon’s sharp rhetoric against the controversial visa programme, which allows the hiring of highly skilled tech workers from overseas, has come as others in Trump’s orbit, such as entrepreneur Vivek Ramaswamy, have also tried to argue that US companies need trained foreign employees.

That argument has come under fire not just from Bannon, but also from other far-right supporters of Trump – even as Musk and Ramaswamy, whom Trump has tasked with cutting government spending in his new administration, have now softened their position on H-1B visas. Following the backlash, the tech barons have said that the programme needs to be reformed.

But what is the H-1B scheme that is splitting Trump’s allies? Why is it so divisive? Has Trump’s own U-turn on the issue contributed to tensions within the MAGA movement? And how will Trump manage the division between his MAGA base and Big Tech – a sector that traditionally leaned towards the Democrats but has in recent weeks almost bent over backwards to placate the incoming president?

Has Trump flip-flopped on H-1B visas?

The H-1B is a temporary and non-immigrant US visa that allows companies in the US to bring in highly skilled workers from abroad.

In 2016, Trump called the programme, which was introduced in the 1990s under Republican President George HW Bush, “very, very bad” for American workers.

Months before the end of his first term as president in 2020, Trump imposed a temporary ban on H-1B visas, which was later struck down by a federal court.

But less than five years later, the US president-elect has thrown his weight behind the visa scheme, saying: “It’s a great programme.”

“I have many H-1B visas on my properties. I’ve been a believer in H-1B,” he told New York Post.

Those comments came at a time when Musk was facing pushback from MAGA supporters.

Musk played a key role in Trump’s win as he pumped money into the presidential campaign and used X to megaphone hardline MAGA views. That has earned him Trump’s goodwill and influence.

But Trump has pushed back on the notion that Musk enjoys outsized influence. “And no, he’s not taking the presidency,” Trump made the comments during a speech in December, days after the Tesla owner led efforts to kill a spending bill in Congress.

Experts say Trump will need to manage a delicate balance between the Silicon Valley elite, whom he needs for his plans to create jobs, and the MAGA base, from where he draws his political support.

What is an H-1B visa – and which companies benefit most?

The H-1B is “the largest temporary work visa” programme in the US, said Jeanne Batalova, a senior policy analyst at Migration Policy Institute, a Washington, DC-headquartered think tank.

There is an annual cap on the number of H-1B visas guaranteed, set to 65,000 H-1B visas per fiscal year. It is decided by a lottery system, which randomly selects when the number of visa petitions exceeds the cap.

The foreign worker must be employed in a specialised occupation with at least a bachelor’s degree. The employer sponsors foreign workers from the fields of information technology, medicine and publication. The visa is granted for three years but can be extended to six years.

American and Indian tech companies – and a few consulting firms – dominate the scheme. Six of the top 10 beneficiaries of the scheme in 2024 were US companies, according to the National Foundation for American Policy (NFAP), a nonpartisan think tank on trade and immigration: Amazon, Cognizant, IBM, Microsoft, Google and Meta. Three are Indian: Infosys, TCS and HCL. Capgemini, a French tech and consulting firm, rounds up the list.

But there is another, major new beneficiary of the scheme, per the NFAP’s data: Musk’s electric car giant Tesla. In 2024, Tesla won 742 new H-1B visas through the lottery, more than double the 328 it secured in 2023. In addition, Tesla had another 1,025 existing H-1B visas extended in 2024.

“Due to data limitations, we don’t have a good sense of the total H-1B visa holders currently in the US. However, as of 2019, close to 600,000 highly skilled immigrants worked in the US economy on H-1B visas. Approximately 120,000 immigrant workers received new H-1B visas in 2024,” Batalova said.

However, it isn’t just MAGA advocates who are critical of the scheme.

Ronil Hira, an associate professor in the Department of Political Science at Howard University, said that the H-1B programme needs to be reformed. Problems plaguing the programme, he said, include the poor selection process, where “eligibility standards are too low, so the application lottery is flooded”, and “visa winners are selected by lottery instead of rational criteria”.

What is the argument over H-1B visas?

The recent argument began when far-right conspiracy theorist Laura Loomer criticised Trump’s pick for artificial intelligence (AI) adviser, Sriram Krishnan, who has argued the US needs more foreign skilled workers to remain competitive in the technology industries.

On December 28, Musk threatened to “go to war” on the issue.

“The reason I’m in America along with so many critical people who built SpaceX, Tesla and hundreds of other companies that made America strong is because of H-1B,” Musk posted.

Musk was born in South Africa and previously held an H-1B visa before he became a naturalised US citizen.

Ramaswamy jumped on the debate, saying that technology companies hire foreign-born employees because of a difference in culture.

“A culture that celebrates the prom queen over the math olympiad champ, or the jock over the valedictorian, will not produce the best engineers,” he wrote, without mentioning the H-1B visa.

But he later clarified that the H-1B system “is badly broken [and] should be replaced”.

Bannon, who served under Trump’s previous term, has called the H-1B programme a “total scam” as it allows tech companies to bring cheap labour from abroad at the cost of American workers. He has called for the deportation of H-1B visa holders as part of the wider deportation plans.

He railed particularly against Musk, saying the Tesla owner’s “sole objective is to become a trillionaire. That’s his objective,” Bannon told the Italian newspaper, Corriere della Sera, on January 8

“He will do anything related to make sure that any one of his companies is protected or has a better deal or he makes more money. His aggregation of wealth, and then – through wealth – power: that’s what he’s focused on. The American working people in this country are not going to tolerate it.”

Batalova explained that immigration has long been a contentious policy area in the US. There are “two existential perspectives battling over the hearts and minds of the American public and voters”, she said.

She elaborated that one perspective perceives immigrant workers, such as those on H-1B visas, as contributors to US economic power and global competitiveness. The other perspective views immigrant workers as competitors for jobs and limited economic resources.

Batalova added that this struggle has, at the moment, resurged and is “fuelled in big part by voter discontent of how the government handled immigration after the COVID-19 pandemic, but also discussions about economic security and national competitiveness, particularly regarding China”.

“Major tech companies and business groups continue to lobby for expanding the programme, arguing it is crucial for maintaining America’s innovative edge. However, layoffs in the tech sector, combined with cases of worker replacement at various companies, have provided ammunition for H-1B critics.”

Who else has criticised the H-1B?

Criticism of the H-1B visa has also come from the left.

On December 29, Democratic Representative Ro Khanna told Fox News that the H-1B needs to be reformed.

“You can’t underpay these H-1B folks coming in,” Khanna said. The programme “shouldn’t be for accountants or entry-level IT jobs. It should really be for exceptional talent. We should have that balance”.

Vermont Senator Bernie Sanders has also criticised the H-1B visa programme. “The main function of the H-1B visa program is not to hire ‘the best and the brightest,’ but rather to replace good-paying American jobs with low-wage indentured servants from abroad,” he posted on X.

Who are the H-1B visa holders?

Around 70 percent of H-1B visa recipients are from India and another 10 percent are from China.

As the debate rages in the US, some tech firms have withdrawn job offers to Indian workers, according to a report in the Indian newspaper, Times of India.

But India’s Ministry of External Affairs argued that H-1B visas benefit both countries.

“India-US economic ties benefit a lot from the technical expertise provided by skilled professionals, with both sides leveraging their strengths and competitive value. We look forward to further deepening India-US economic ties, which are to our mutual benefit,” Randhir Jaiswal, India’s foreign ministry spokesperson, said during a news conference on January 3.

Has Trump softened on other immigration issues?

Trump’s campaign promises during the election comprised a hardline immigration policy. He has threatened to carry out mass deportation of undocumented immigrants and boost security at the border to prevent asylum seekers from entering the country.

A month after he was voted in, he told NBC’s Kristen Welker on a Meet the Press episode that he plans to end birthright citizenship in the US, a policy that has been in place for more than 150 years. The right is guaranteed in the Fourteenth Amendment of the US Constitution.

However, during the interview, the president-elect said he was willing to work with Democrats to keep “Dreamers”, undocumented people who arrived in the US as children and have lived in the country most of their lives.

When it comes to the H-1B visa in Trump’s second term, “no one knows what Trump will do. He did nothing in his first term even though he campaigned to reform the programme. It was a glaring unfulfilled promise”, Hira, of Howard University, said.

“The Republicans control Congress [both House and Senate] and the White House, so they have the power to change the programme for better or for worse, or keep the status quo. Will they exercise that power for change? Internal political calculations will dictate the direction they take.”