President Donald Trump and his administration is hoping to squash the International Entrepreneur Rule, which was set to take effect July 17. President Trump is seen here holding a drone as George Mathew, Indian American CEO and chairman of Kespry, explains how it works during the American Leadership in Emerging Technology Event at the White House June 22, 2017 in Washington, DC. (Olivier Douliery-Pool/Getty Images)

The Trump administration has suspended the launching of a rule that would allow some foreign entrepreneurs to stay in the U.S. and build their companies.

While the International Entrepreneur Rule — a rule close to what Silicon Valley has been seeking for some time — was set to take effect July 17 following the Department of Homeland Security’s January approval, now President Donald Trump and his administration have put a halt to it with hopes of eliminating it all together, according to reports.

According to a Mercury News report, Silicon Valley tech advocates say the move will send an unwanted message to future startup pioneers and risk the region’s long-term competitiveness.

It’s also a strike against the tech industry’s political influence in D.C. under Republican leadership, the report said.

“This is unquestionably a setback for the United States in the global race for talent,” said Todd Schulte, president of FWD.us, an immigration advocacy group backed by the tech industry, in the Mercury News report.

The start date of the rule has been pushed back to March 2018 while it collects comments regarding “a proposal to rescind the rule,” according to a notice that is to be published in the Federal Register, the report said.

Should the rule go into effect, it would give entrepreneurs who do not qualify for existing visa programs, such as the H-1B and L-1 programs routinely sought by Indian individuals seeking work in the U.S., a chance to stay in the U.S. and grow their businesses.

The Trump administration is working on altering the H-1B and L-1 visas as well, as part of his “Buy American, Hire American” executive order.

The San Francisco Chronicle reported how Indian American entrepreneur Sharoon Thomas moved his e-commerce software startup from Mountain View, Calif., to Canada to keep his company going.

Word of the notice came during a week in which Trump met with tech giants Microsoft and Apple and their chief executives Indian American Satya Nadella and Tim Cook, respectively, to build up a wavering relationship between Silicon Valley and Washington, the Chronicle reported.

Peter Leroe-Muñoz, vice president of technology and innovation policy at the Silicon Valley Leadership Group, said the move was symptomatic of the Trump administration’s efforts to undermine immigration reform, according to the Mercury News.

“That’s a lost opportunity,” he said in the report.

Max Versace, co-founder of the artificial intelligence startup Neurala, said in the Mercury News report that the delay is discouraging to immigrant tech workers.

“I would think twice to go to a place where I’m not welcome,” he said in the report.

To qualify for the “startup visa” rule, a foreigner must demonstrate that he or she will contribute to economic growth or job creation and show that a reputable investor has put at least $250,000 into the company.

It allows the entrepreneur to stay in the U.S. for 30 months, with the possibility of a 30-month extension.

Critics say the rule’s use of “parole” authority with respect to visitors from abroad is problematic, the report said.

In this case, the term parole means that individuals are not formally admitted into the U.S. — as they would be with a work visa such as an H-1B — but legally can stay for a temporary period, it said.

Four Republican senators — Jerry Moran of Kansas, Orrin Hatch of Utah, and Jeff Flake and John McCain of Arizona — wrote to the Department of Homeland Security expressing support for the rule, according to the report.

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