Washington DC - A federal judge on Tuesday upheld President Donald Trump's $100,000 fee to process H-1B visa applications, acknowledging it could "inflict significant harm on American businesses and institutions of higher education."

In a 56-page opinion, US District Judge Beryl Howell wrote that the president has "broad statutory authority" to address "a problem he perceives to be a matter of economic and national security."

The $100,000 application fee announced in September gave companies just 36 hours notice before it went into effect, triggering chaos and confusion over how it would work and who would be hit.

It is part of Trump's wider war on immigrants that has been dominating his second term.

The 79-year-old argued that the H-1B visa system was being abused to replace American workers with people willing to work for less money.

The US awards 85,000 H-1B visas per year on a lottery system. India accounts for around three-quarters of the recipients.

Tech entrepreneurs – including Trump's former ally Elon Musk – have warned against targeting H-1B visas, saying that the US does not have enough homegrown talent to fill important tech sector job vacancies.

The lawsuit was brought by the US Chamber of Commerce, a pro-business lobbying group, and the Association of American Universities, which represents 69 US-based research universities.

Together, the plaintiffs claimed the affected workers "contribute enormously to American productivity, prosperity and innovation."

The Chamber is typically Republican-friendly, spending more than $76 million for lobbying in 2024 alone and nearly $6 million to back Republican political groups and candidates with direct contributions, according to OpenSecrets.org.

At least two additional lawsuits against the $100,000 H-1B visa application fee remain ongoing.