A leading Harvard economist has delivered a cautionary outlook about the trajectory of US economic growth following President Donald Trump’s new wave of tariffs and steep visa fee hikes targeting Indian professionals.
The warnings arrive at a tense moment in US-India relations, with economic and diplomatic consequences reverberating through both economies.
Kenneth Rogoff, a former chief economist at the IMF, emphasized that the administration’s trade measures would not only hinder economic activity but also impact the broader US innovation ecosystem, where Indian talent plays a significant role.
The new 50 percent tariffs and hiked H-1B visa fees are rapidly influencing forecasts and business strategy alike.
Why Does Rogoff See Growth Slowing?
Kenneth Rogoff attributes the expected slowdown to a two-pronged policy approach: sharply higher tariffs on key Indian imports and dramatic fee increases for H-1B visas, making US market access more restrictive.
He points out that such policies raise costs, limit the entry of skilled labor, and weaken investment sentiment, thereby undercutting growth at a critical time for the economy.
He notes that the Organization for Economic Cooperation and Development recently lowered its US GDP forecast for 2025 to 1.8 percent, a decrease of one percentage point from the prior year.
The Congressional Budget Office echoed this trend, linking sluggish consumer spending and delayed investment to elevated duties and diminished workforce diversity.
Did you know?
The United States collected more in tariff revenue in September 2025 than in any prior month since World War II.
What Are the Details of the US-India Trade Dispute?
Tensions between Washington and New Delhi have escalated markedly since late August 2025, when the US doubled already punitive tariffs on Indian goods to a striking 50 percent in apparent retaliation for India’s Russian oil purchases.
The resulting duties now stand among the highest ever imposed by the US on any major trading partner.
Negotiations on a long-awaited bilateral trade agreement have stalled despite recent diplomatic engagement.
India’s push for energy policy independence and the US insistence on market reforms mean that both sides remain far apart on core trade issues, leaving the dispute unresolved and likely to intensify.
How Do Visa Fee Hikes Impact US Competitiveness?
The Trump administration's sudden $100,000 fee for new H-1B visa petitions has sparked anxiety across the technology sector. Indian professionals, who have formed 70 percent of all H-1B visa holders in recent years, now face substantial barriers that threaten to disrupt the supply of high-skilled workers so vital to Silicon Valley and US innovation at large.
Rogoff argues that curtailing Indian tech talent could have “very big effects” on America’s position as a global technology leader. He describes the fee hike as both costly and poorly planned, warning that the shift risks undermining growth prospects not just for individual firms but for entire US industries dependent on international expertise.
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Can Diplomacy Mend the Trade Relationship?
Despite a series of high-level talks between Commerce Minister Piyush Goyal and US negotiators, prospects for a near-term deal remain bleak. The deadlock highlights fundamental differences in trade philosophy, as India maintains its stance on strategic autonomy and the US advocates for more comprehensive economic reforms.
Rogoff has cautioned that the Trump administration’s confrontational strategy may yield unintended consequences, pushing India towards greater alignment with other major global economies and provoking retaliatory actions. As diplomatic strains persist, the possibility of mutually damaging tariffs lingers.
What Broader Economic Risks Are Emerging?
Economists warn that the US approach may encourage other trading partners to unify against one-sided dealmaking, reconfiguring global alliances.
Already, early signs suggest China, the European Union, Brazil, and India may coordinate responses to blunt US leverage, raising the threat of further trade retaliation and long-lasting economic fallout.
The evolving policy landscape is also affecting consumer and business confidence within the US.
With growth forecasts downgraded and policy uncertainty on the rise, both investors and policymakers are working to assess their next moves in what could become one of the defining economic controversies of the decade.
Looking ahead, experts say that American decision-makers face a critical choice: either double down on protectionist measures or chart a course toward renewed engagement and innovation.
The future of US economic growth may depend on how swiftly the country adapts to the risks and realities of a transformed global trade environment.
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