Seeking to carry out a campaign pledge to put "America First", Mr Trump signed an executive order on the H-1B visa program. But the number of applications for the lottery, conducted earlier this month, declined from 236,000 past year, possibly reflecting concern about new restrictions.
His administration will need to address such issues as labor laws (including wage laws) that apply to US citizens but not H-1B visa holders; guaranteeing that people with needed skills, instead of those who win the lottery, are at the front of the visa line; stamping out fraud (which the federal immigration service has estimated is found in as many as 13 percent of visa applications) and protecting visa holders who now are vulnerable to abuse by American employers.
Trump derided the "totally random" lottery system that used to allot H-1B visas to employers, saying it allows companies to undercut American workers by bringing in lower-paid replacements, which drives down wages. The program is especially popular in the technology industry, where it draws the most workers from India.
The tech industry has argued that the H-1B program is needed because it encourages students to stay in the USA after getting degrees in high-tech specialties and because companies can't always find enough American workers with the skills they need. "This is legal underpayment".
The US has already moved on addressing this issue by announcing a new set of guidelines for those qualifying for H-1B visas. The additional scrutiny DHS has ordered will include "site visits" to determine whether "H-1B dependent employers are evading their obligation to make a good faith effort to recruit US workers", the Trump administration says.
But Trump returned to Tuesday to the economic tough talk of his campaign, saying: "We're going to make some very big changes or we are going to get rid of NAFTA for once and for all", referring to the Clinton-era USA trade pact with Canada and Mexico.
Steve Tobocman, executive director of Global Detroit, says the Metro Detroit area employs more H-1B visa holders than Boston, Seattle, Houston, Philadelphia, Atlanta, or Research Triangle, NC, citing Brookings Institution research on H-1B visa approvals in 2013.
Trump and other critics of the program say it is abused by those Indian firms, who - they claim - flood the visa lottery with applications and then send workers to the USA on salaries that undercut their American counterparts. "We do know that numerous companies that have this business model are the ones that are paying the lowest wages to H-1Bs".
But he said some ideas could make the system ineffective, such as requiring advertisement of job openings for long periods to prove the unavailability of U.S. workers. "It lowers the wages for everybody in that sector, depressing what Americans can command". White House spokesman Sean Spicer said he wanted to visit "a company that builds American-made tools with American workers".
"This will stop", Trump vowed.
In the USA, outsourcers often bring staffers into the country on work visas, train them in the tech departments of leading corporations and then rotate them back to India where pay and living costs are lower. An executive order signed this week by President Trump is a small step toward cleaning up the mess, but it is only the first step down what likely will be a long road.
Both Democratic and Republican critics have argued that companies such as Walt Disney Co (DIS.N) and Southern California Edison Co (SCE_pe.A), a utility, have used the program to terminate in-house IT employees and replace them with cheaper contractors.