America First

Germans Attack Trump Foreign Worker Plan

  • Why it matters

    Why it matters

    Donald Trump made a pledge to restrict foreign labor a mainstay of his election campaign.

  • Facts

    Facts

    • The US government admits 85,000 immigrants each year under its H1-B visa program, which mostly attracts workers from the high-tech sector.
    • Mr. Trump says the program is used by companies to replace Americans with foreign workers and wants to tighten it up.
    • There are an estimated 700,000 people in the US working for German companies.
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    Audio

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President Trump Delivers Remarks At Snap-On Tool Headquarters
True to his word? Source: Bloomberg

Germany has cried foul over a move by Donald Trump to make it more difficult for American companies to hire foreign workers.

After the US President signed an executive order requiring applicants and employers to demonstrate that jobs were only going to those with the highest qualifications, the German economy ministry came out with a statement against the decree.

“If the visa waiving practice is reserved specifically for highly skilled workers, this could affect a number of companies with offices in the US,” a spokesperson said.

The ministry also criticized the fact that German companies, like other foreign firms, are already excluded from some public contracts in the US due to existing “Buy American” laws. The new order does nothing to change or intensify those rules, but the ministry said: “It remains to be seen which additional measures will follow.”

Germany’s business community has also attacked the move. Achim Dercks, the deputy chief executive of the German Chamber of Industry and Commerce (DIHK), said there were some 700,000 people in the US working for German companies.

The German government, at least in principle, is trying to dissuade Mr. Trump from his protectionist inclinations.

“German companies will be directly affected by this severe limitation on qualified work visas,” Mr. Dercks said. “Without an appropriate visa, for example, instructors cannot be sent to the US to pass their knowledge on to American trainees.”

With his latest executive order, which has stirred controversy in the US and abroad, Mr. Trump is trying to make good on one of his biggest campaign promises, namely to find jobs for out-of-work Americans.

As a candidate, Mr. Trump lashed out against the government’s H1-B visa program, under which 85,000 immigrants are admitted to the US each year, mostly to work in the high-tech sector. He promised to end the program, which he claimed was being used by companies to replace American workers with foreigners who would work for less money.

Mr. Trump announced the new order at the headquarters of Snap-on Tools in Wisconsin, a backdrop that epitomized America’s blue-collar workforce. The factory stood in predictable contrast to the tech companies in Silicon Valley, which rely most heavily on the H1-B visa program and are the most vocal opposition.

The new order does not end the H1-B visa program, but it does force companies to show that the people they want to hire – and thus, the ones who will ultimately get visas – hold the highest qualifications in their field. Mr. Trump called the existing system – essentially a lottery – “wrong.”

In addition to these changes, Mr. Trump also promised that his administration would only award public contracts to American companies.

According to the Trump administration, the majority of the 85,000 people who enter the US every year on an H1-B visa are employed under less-favorable conditions than are typical in their sector. The government also says around 80 percent of H-1B visa holders earn less than the median wage in their sector.

The European Commission, the EU’s executive arm, also expressed caution over the US move. A spokesperson said that Mr. Trump’s announcement was part of a major reorientation of American trade policy, the consequences of which must be carefully scrutinized.

The Commission added that it expected all of its trading partners, including the US, to adhere to international rules. It cited the World Trade Organization’s Agreement on Government Procurement.

Pursuing policies aimed at strengthening domestic consumption is not an entirely new concept for the US. The 1933 Buy American Act is still in force. During last year’s negotiations over the Transatlantic Trade and Investment Partnership free trade agreement, commonly known as TTIP, the Commission tried very hard to get the federal government in the US as well as state-level governments to position themselves more openly toward Europe.

The German government, at least in principle, is trying to dissuade Mr. Trump from his protectionist inclinations. Sources in Berlin have confirmed to Handelsblatt that German Finance Minister Wolfgang Schäuble and Economy Minister Brigitte Zypries have composed an eight-page paper outlining various arguments against Mr. Trump’s criticisms of Germany’s export surplus. This trade imbalance is “primarily attributable to market-based decisions of supply and demand by companies and private consumers in world markets,” the paper says.

At the end of May, Ms. Zypries will fly to the US, where she will meet her counterpart Wilbur Ross, as well as governors from US states where German companies have foreign branches or subsidiaries. In fact, Mr. Trump’s “Buy American” decree only applies to contracts at a federal – not state – level. The economy minister said she intended to address the issues at hand and seek a constructive dialogue.

 

Katharina Kort is a Handelsblatt reporter based in New York. Till Hoppe reports on politics for Handelsblatt, with a focus on defense, domestic policy and cyber issues. Dana Heide is a political correspondent for Handelsblatt in Berlin. To contact the authors: kort@handelsblatt.com, hoppe@handelsblatt.com, d.heide@vhb.de

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