Trump signed the order called "Buy American, Hire American" during his Tuesday visit at an American company in the state of Wisconsin. During the presidential campaign, Trump had promised to change the country's immigration policies.
A senior Trump administration official says the order calls for "the strict enforcement of all laws governing entry into the United States of labor from abroad."
The order directs the departments of Labor, Justice, Homeland Security and State to take action against fraud and abuse in the immigration system to protect American workers. It also directs the departments to propose reforms to ensure that H-1B visas are given only to the most-skilled or highest-paid applicants.
The H-1B visa program is designed for foreigners to work for American companies in jobs that usually require higher education -- including scientists, engineers or computer programmers. The government uses a lottery system to give 65,000 visas every year. It gives another 20,000 visas to graduate student workers.
The U.S. Citizenship and Immigration Services says the number of applications for H-1B visas fell to 199,000 this year from 236,000 in 2016.
American companies say they use the visas to recruit highly skilled workers. A majority of the H-1B visas, however, are given to overseas companies that then send workers to American companies.
Some critics say those foreign companies give the visas to people to perform lower-level information technology, or IT, jobs. Critics also say the lottery system works in the favor of the large firms that submit a large number of applications.
A Trump administration official says the way the system now works, foreign workers are able to come to the United States and replace American workers because the foreign workers accept lower wages than Americans. The official says this violates "the principle of the program." The administration has said large American technology companies have been using the program to hire large numbers of foreign workers, lowering wages for Americans.
The Reuters news agency examined U.S. Labor Department records and found that more than 15 percent of Facebook's employees in the United States in 2016 used a temporary work visa.
Employers including Walt Disney World and the University of California in San Francisco have replaced American technology workers with H-1B visa holders. Some of the American workers were forced to train the foreign workers who replaced them.