Corona-Related Entry Bans Endanger the United States and German Enterprises

The Trump administration’s restrictive visa policy is making it increasingly hard for German companies to do business in the United States. The entry ban for employees leads to production delays and endangers the success of projects. Restrictions on business transactions can also damage the restart of the U.S. economy and its position as a business location.

An entry ban has been in force in the United States since mid-March 2020 for all persons who had stayed in the Schengen Area for a period of 14 days before entering the country. Some business travellers with special visas were initially allowed to enter the country under quarantine rules. Those who entered against these regulations were threatened with deportation.

In mid-April, U.S. President Donald Trump decreed that the granting of new Green Cards be suspended for at least 60 days and that the granting of “non-immigrant visas” be revised. However, these restrictions were not justified by health concerns, but rather by “the prioritization of U.S. citizens in job allocation.” Furthermore, with reference to the labour market, in late June Trump suspended the issuance of visas for foreign workers under the categories L, J and H1B, until the end of the year. L1 visas are used for internal employee transfers within companies. J1 visas enable, for example, participation in exchange programs for students, as well as studies and internships in the United States. H-1B visas were intended for highly qualified professionals. Applications for category E visas for “Treaty Traders and Treaty Investors” are now being processed again at the U.S. Consulates in Germany.

Since the end of July, business trips to the United States have only been possible again in a few cases for people coming from the Schengen Area. Investors, technical experts or specialists, and senior-level managers holding a valid visa, holding a valid ESTA travel authorization, or applying for a category E visa can apply for exceptions to the applicable entry restrictions in the name of the „national interest“.

Shortage of Skilled Workers in the U.S. Worsens

The considerable restrictions in passenger traffic not only negatively impacts German companies. It also hinders the restarting of the U.S. economy, as strategically important projects cannot commence due to a lack of skilled workers. Even before the corona crisis, German companies had criticized a growing shortage of skilled workers in the United States despite near full employment (3.5 percent unemployment, February 2020). In a survey conducted by the Chicago Chamber of Commerce in fall 2019, only 13 percent of surveyed companies indicated that they never or rarely had difficulty finding qualified talent to fill open positions.

BDI Surveys on Restrictions

How exactly German companies have been affected by the U.S. travel restrictions was determined by the BDI in June and July 2020 in a survey conducted before the introduction of the aforementioned exemptions. The results of this non-representative survey (23 participating companies) show that due to the travel restrictions, critical positions remain unfilled, projects have been delayed, and the exchange of experience across locations is restricted. Other problems for the surveyed companies include reduced flight offerings, lengthy visa renewals, and the return of employees stranded in the EU. 75 percent of companies deem the current visa allocation for employees an impairment for important projects or for their own operations. 65 percent of those surveyed feel that the granting process is too cumbersome and slow. In another BDI survey, all companies regularly making assignments to the United States confirmed having problems with entry and visa issuance.

These results are in line with a survey conducted by the German Mechanical Engineering Industry Association (VDMA) covering the period from 22 June to 5 July 2020. 65 percent of surveyed enterprises believe that the entry restrictions will significantly impair the performance of commissioning, installation and service work for U.S. customers. 58 percent reported that U.S. customers are pressing for the execution of the contracted technical services, considering that production and delivery delays due to travel and visa restrictions are expected.

Travel and Visa Restrictions Endanger the Attractiveness of the United States as a Business Location

The continuation of the entry ban and visa restrictions for business travellers harms both German companies active in the United States and the attractiveness of the country as a business location in the medium- and long-term. Delays in production, delivery or the implementation of strategic projects that rely on knowledge transfer hinder the resumption of economic activity. Companies, customers, suppliers, and employees will suffer as a result. The United States should therefore quickly relax visa and entry restrictions with the necessary hygiene precautions in order to not place an additional burden on its own economy amid a pandemic.