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Introduction
I was at the EDGE Partners board meeting recently, and the conversation was centered around FDI and export strategies—an air of optimism. Right after that meeting, a major increase in H-1B visa fees was announced. The double impact of tariffs and increase in visa fees-Stunning. This article is a reminder that to succeed in today’s climate, companies must be ready to go global sooner rather than later. I am writing particularly about the impact of the increase in visa fees and tariffs on small and medium size companies (SME’s).
The Role of H-1B Visas in Growth and Innovation
More than 52,000 companies used the H-1B program in 2024. While large corporations might be able to absorb the significant increase in costs, small and medium-sized enterprises (SMEs) often can’t. Rising visa and tariff costs threaten competitiveness and even viability.
- H-1B visas are essential for recruiting specialized talent—in tech, engineering, medicine, and other advanced fields.
- As visa fees increase, the U.S. risks losing appeal for top global talent, many of whom may look to Canada, the UK, or other countries with lower immigration barriers.
- SMEs are disproportionately disadvantaged. They don’t have the scale to absorb legal and processing costs or the flexibility to delay hiring. This puts them behind larger competitors in innovation and hiring.
The Hidden Cost of Tariffs
- Tariffs raise the cost of raw materials and imported goods, squeezing profit margins—especially for SMEs that lack economies of scale.
- These pressures force tough choices: raising prices, risking customer loss, reducing staff, or cutting corners.
- Uncertainty in trade policies and retaliatory tariffs increases risk for exporters and makes strategic planning difficult.
Global Diversification Is No Longer Optional
There is a path forward. Because of these mounting pressures—visa hikes, tariffs, regulatory unpredictability—SMEs must start thinking globally.
- Establishing operations or partnerships abroad helps reduce reliance on U.S. immigration policy and domestic cost structures.
- Emerging markets—especially in Asia, Latin America, and Africa—are showing rising demand, growing digital adoption, and cost-efficient business environments.
- Having global supply chains and talent pipelines allows companies to remain agile when one market faces disruption.
The Strategic Advantages of Overseas Expansion
- Talent Access: Foreign bases allow companies to hire skilled workers without being constrained by U.S. visa rules.
- Cost Efficiency: Operational and labor costs are often significantly lower in many developing or emerging markets.
- Market Insights & Local Adaptation: On-the-ground presence improves understanding of customer needs, cultural nuances, and regulatory systems—boosting long-term success.
- Diversified Revenue Streams: Selling in multiple markets spreads risk—when demand slows in one, others may still grow.
Conclusion
Companies should not abandon the U.S. as there remain many opportunities. For foreign companies looking to expand to the U.S., it just means being more creative. I have written several articles about strategies for inbound investment which you can look up online. The bottom is companies should take advice on how U.S. policies and structural changes can impact their long term strategies. These are not temporary shifts—they are long-term signals that global expansion is no longer optional, but essential.
Whether for talent, supply chains, market access, or resilience, companies—especially SMEs—must embrace globalization. Those who do will be better prepared for the future. Those who don’t may find themselves increasingly vulnerable.
About the Author
Gary Sumihiro is the founder of Sumihiro Investments LLC, a global strategic advisor, and board member of several companies. Recently, Sumihiro Investments entered into a strategic relationship with EDGE Partners LLC. For more information about Sumihiro Investments and EDGE Partners see the linked article.
About EDGE Partners
EDGE Partners was founded by Jasjit Singh, the former Executive Director of SelectUSA, the preeminent U.S. Commerce Department investment conference. EDGE is focused on assisting state and local economic development agencies and assisting companies to expand overseas as well as attract foreign direct investment.