A coalition of unions, employers and religious groups filed a lawsuit on Friday seeking to block President Donald Trump’s bid to impose a $100,000 fee on new H-1B visas for highly-skilled foreign workers.

The lawsuit filed in federal court in San Francisco is the first to challenge a proclamation Trump issued two weeks ago announcing the fee as the Republican president moves to further restrict immigration to the United States.

Plaintiffs include the United Auto Workers union, the American Association of University Professors, a nurse recruitment agency and several religious organisations. 

They argued that Trump’s power to restrict the entry of certain foreign nationals does not allow him to override the law that created the H-1B visa programme.

White House spokeswoman Abigail Jackson, in a statement, said Trump’s administration engaged in lawful actions “discouraging companies from spamming the system and driving down American wages, while providing certainty to employers who need to bring the best talent from overseas.”

The programme allows US employers to hire foreign workers in speciality fields, and technology companies in particular rely heavily on workers who receive H-1B visas.

Critics of H-1Bs and other work visa programmes say they are often used to replace American workers with cheaper foreign labour. But business groups and major companies have said H-1Bs are a critical means to address a shortage of qualified American workers.

Employers who sponsor H-1B workers currently typically pay between $2,000 and $5,000 in fees, depending on the size of the company and other factors.

Trump’s order bars new H-1B recipients from entering the United States unless the employer sponsoring their visa has made an additional $100,000 payment. The administration has said the order does not apply to people who already hold H-1B visas or those who submitted applications before September 21.

Trump, in his unprecedented order, invoked his power under federal immigration law to restrict the entry of certain foreign nationals who would be detrimental to the interests of the United States.

He said that high numbers of lower-wage workers in the H-1B program have undercut its integrity and that the programme threatens national security, including by discouraging Americans from pursuing careers in science and technology. 

He said the “large-scale replacement of American workers” through the H-1B programme threatens the country’s economic and national security.

The plaintiffs argue that Trump has no authority to alter a comprehensive statutory scheme governing the visa programme and cannot, under the US Constitution, unilaterally impose fees, taxes or other mechanisms to generate revenue for the United States, saying that power is reserved for Congress.

“The Proclamation transforms the H-1B programme into one where employers must either ‘pay to play’ or seek a ‘national interest’ exemption, which will be doled out at the discretion of the Secretary of Homeland Security, a system that opens the door to selective enforcement and corruption,” the lawsuit said.

The groups argue that agencies, including the US Department of Homeland Security’s US Citizenship and Immigration Services and US State Department, likewise adopted new policies to implement Trump’s proclamation without following necessary rulemaking processes and without considering how “extorting exorbitant fees will stifle innovation.”

The H-1B programme offers 65,000 visas annually to employers bringing in temporary foreign workers in specialised fields, with another 20,000 visas for workers with advanced degrees. The visas are approved for a period of three to six years.

India was by far the largest beneficiary of H-1B visas last year, accounting for 71% of approved visas, while China was a distant second at 11.7%, according to government data.

• Conservative nationalist, 64, picked to lead ruling party.
• Investors wary of spending designed to win back voters.
• Takaichi defeated moderate Koizumi, a political scion.

Japan’s ruling party picked conservative nationalist Sanae Takaichi as its new head on Saturday, putting her on course to become the country’s first female prime minister.

The Liberal Democratic Party elected Takaichi, 64, to regain trust from a public angered by rising prices and drawn to opposition groups promising big stimulus and clampdowns on foreigners.

The former internal affairs minister, a conservative nationalist with an expansionary agenda, is expected to replace Prime Minister Shigeru Ishiba since the LDP is the largest in parliament.

A vote in parliament to choose a prime minister is expected to be held on October 15.

Party in crisis

The new LDP president is likely to succeed Shigeru Ishiba as leader of the world’s fourth-biggest economy because the party, which has governed Japan for almost all the postwar period, is the biggest in parliament. But this is not assured as the party and its coalition partner lost their majorities in both houses under Ishiba in the past year.

Takaichi, the only woman among the five LDP candidates, beat a challenge from the more moderate Shinjiro Koizumi, 44, who was bidding to become the country’s youngest leader in the modern era.

A former internal affairs minister with an expansionary economic agenda, Takaichi inherits a party in crisis.

Various other parties, including the fiscally expansionist Democratic Party for the People and the anti-immigration Sanseito have been steadily luring voters, especially younger ones, away from the LDP.

“Recently, I have heard harsh voices from across the country saying we don’t know what the LDP stands for anymore,” said Takaichi in her speech before the second-round vote.

“That sense of urgency drove me. I wanted to turn people’s anxieties about their daily lives and the future into hope,” she added.

Takaichi, who says her hero is Margaret Thatcher, Britain’s first female prime minister, offered a starker vision for change than Koizumi and is potentially more disruptive.

An advocate of late premier Shinzo Abe’s “Abenomics” strategy to jolt the economy with aggressive spending and easy monetary policy, she has previously criticised the Bank of Japan’s interest rate increases.

Such a policy shift could spook investors worried about one of the world’s biggest debt loads.

Takaichi has also raised the possibility of redoing an investment deal with US President Donald Trump that lowered his punishing tariffs in return for Japanese taxpayer-backed investment.

Her nationalistic positions — such as her regular visits to the Yasukuni shrine to Japan’s war dead, viewed by some Asian neighbours as a symbol of its past militarism — may rile South Korea and China.

She also favours revising Japan’s pacifist postwar constitution and suggested this year that Japan could form a “quasi-security alliance” with Taiwan, the democratically governed island claimed by China.

If elected, Takaichi said she would travel overseas more regularly than her predecessor to spread the word that “Japan is Back!”

Takaichi is expected to hold a press conference around 0900 GMT.

• Trump freezes at least $28bn in funds for Democratic areas. 
• Pritzker says that amounts to hostage taking. 
• Bid to reopen government fails in Senate as both sides dig in. 

US President Donald Trump’s administration froze $2.1 billion in Chicago transit funding on Friday, starving another Democratic city of funds as a bid to end the government shutdown failed again in the Senate.

On the shutdown’s third day, Trump ramped up pressure on Democrats to end the standoff and agree to a Republican plan that would restore government funding. But that failed in a 54-44 Senate vote, short of the chamber’s 60-vote standard, ensuring that the shutdown will last until at least Monday.

The administration has now frozen at least $28 billion in funding for Democratic cities and states, escalating Trump’s campaign to use the extraordinary power of the US government to punish political rivals. Budget director Russ Vought said the Chicago money, earmarked for elevated train lines, had been put on hold to ensure it was not “flowing via race-based contracting.”

Trump has made Chicago, the nation’s third-largest city, a regular rhetorical punching bag and has threatened to send in National Guard troops.

Illinois Governor JB Pritzker, a high-profile Trump critic seen as a possible 2028 Democratic presidential candidate, said the funding freeze amounted to hostage-taking.

“It’s attempting to score political points but is instead hurting our economy and the hardworking people who rely on public transit,” he said on social media.

The White House said it was also identifying funds that could be withheld from Portland, Oregon, a left-leaning city that was home to high-profile protests during Trump’s first term.

Trump has also threatened to fire more federal workers, beyond the 300,000 he is forcing out this year, and dozens of agencies have submitted workforce reduction plans, according to a White House source speaking on condition of anonymity.

Concern about ‘bad-faith environment’

Many Republicans say they are not troubled by Trump’s pressure campaign, even though it undercuts Congress’ constitutional authority over spending matters. In addition to cutting funds to Democratic cities, Trump and his allies have taken to posting social media images with cartoon mustaches and sombreros drawn on his Democratic opponents.

“Is he trying to apply pressure?” House of Representatives Speaker Mike Johnson, a Republican, told reporters. “He probably is, yeah. And I applaud that.”

But others say the cuts are complicating efforts to reach a deal that would allow the government to reopen. “If you do that, you’re going to create a bad-faith environment here,” said Republican Senator Thom Tillis, who is involved in informal talks to end the impasse. Tillis has opted not to seek re-election next year.

Trump’s funding freeze so far has targeted transit and green-energy projects, two areas that are championed by Democrats. His administration has also tried to cut counterterrorism funding for Democratic states, which is typically a Republican priority. That has been temporarily blocked in court, and Trump restored $187 million in funding for New York on Friday.

No sign of swift solution

In Washington, the Senate rejected both the Republican funding plan and a Democratic alternative and then adjourned until Monday. The House of Representatives will be out of town all next week, which means it would not be available to vote on any compromise that emerges from the Senate.

If the shutdown stretches past Monday, it will become the fourth-longest in US history. The longest shutdown lasted 35 days in 2018-2019, during Trump’s first term in office.

Trump’s pressure campaign did not appear to sway Democrats. Only three voted for the Republican plan, which would extend funding through November 21, the same number who backed it in earlier votes.

Democrats say any funding package must also expand pandemic-era healthcare subsidies due to expire at the end of December, while Republicans say that issue should be dealt with separately. Those subsidies were passed as part of a 2021 Democratic COVID relief package and now help 24 million Americans pay for coverage. Nearly 8 in 10 Americans support keeping them in place, according to a Kaiser Family Foundation poll.

The standoff has frozen about $1.7 trillion in funds for agency operations, which amounts to roughly one-quarter of annual federal spending. Much of the remainder goes to health and retirement programs and interest payments on the growing $37.5 trillion debt.

Services interrupted

The shutdown, the 15th since 1981, has suspended scientific research, financial regulation, and a wide range of other activities. Pay has been suspended for roughly 2 million federal workers, though troops, airport security screeners, and others deemed “essential” must still report to work.

On Friday, the government did not release its monthly unemployment report, leaving Wall Street guessing about the health of the world’s largest economy.

A prolonged shutdown could disrupt air travel and food aid for millions of Americans, and also force federal courts to close. Federal workers would miss their first paycheck in mid-October if the standoff is not resolved by then.