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President Trump issued executive orders to terminate all federal diversity, equity, and inclusion (DEI) programs. A nationwide injunction from U.S. District Judge Adam Abelson in Baltimore blocked the orders. 

On March 14, an appeals court handed the Trump administration a win. A three-judge panel allowed the orders to be enforced even as the lawsuit challenging them is going on. 

Facebook and Instagram owner Meta canceled DEI programs altogether to align themselves with the Trump administration. Critics of the diversity initiatives said DEI focuses on race and gender at the expense of individual merit. They called it “reverse discrimination” – against white people.

Diversity, equity, and inclusion (DEI) programs were established to support communities historically facing barriers to workplace opportunities. DEI has its roots in the anti-discrimination legislative movement of the 1960s.

The beneficiaries of these programs are not only racial minorities.  DEI efforts have had tangible benefits across all demographics, for example, the implementation of workplace accommodations like breastfeeding rooms, which were championed by DEI advocates, has positively impacted families. Accommodations under DEI have made workplaces more accessible, equitable, and supportive for veterans, and individuals with disabilities, among others who have gained measurably from DEI support.

Access to capital, mentorship, and federal contracting opportunities, benefitted millions of small businesses under SBA, said Dilawar Syed, former deputy administrator of the Small Business Administration SBA at the Ethnic Media Services briefing. “Termination of all federal programs related to DEI and the order to federal contractors to stop promoting diversity will significantly impact small businesses who will be among the hardest hit. " 

Small businesses among hardest hit

There are 33.2 million small businesses in the U.S., comprising 99.9% of all businesses. Over 40% of small business owners are women, four in ten are foreign-born, and one in five are racial minorities, with Indian Americans making up a significant portion of that group. Indian Americans own a significant portion of small businesses in the US, with estimates suggesting they own about 60% of all hotels and have a strong presence in various sectors, including startups and technology.

DEI policies had previously ensured that 15% of federal contracts went to minority-owned businesses. With the rollback, that target has been reduced to just 5%, potentially leading to the closure of hundreds of businesses and the loss of thousands of jobs.  

The SBA has implemented a 20% workforce reduction, reducing the essential support available to small businesses. SBA offices in major economic hubs like New Orleans, Chicago, and Denver are being closed, cutting off critical resources for communities that need them the most.

Syed argued that these cuts would not only harm small businesses but also have negative ripple effects on the broader U.S. economy, particularly in communities where small businesses are the primary source of economic growth.“The fastest growing segment of entrepreneurs in our country are people of color … with an absolutely historic number of veterans as well.” said Syed, “U.S. small businesses form the vast majority of companies in the country. 

In 2024, 46% of Fortune 500 companies, or 230 companies, were founded by immigrants or their children, said Syed.

The closure of key SBA offices, which are critical for securing certification as approved vendors, makes it increasingly difficult for minority-owned businesses to participate in government contracting.

Elizabeth Barrutia, President & CEO, Barú, an independent and woman owned agency dedicated to elevating multicultural marketing shared the anguish of the business community. Reduction in DEI efforts, according to Barrutia, will result in fewer opportunities for minority-owned marketing agencies to secure corporate contracts, reduced funding for ethnic media outlets, and fewer resources allocated to initiatives aimed at underserved communities within large corporate houses like Target, Walmart etc.

Legal implications

The Trump administration’s actions are effectively dismantling legal protections that have helped ensure racial, gender, and economic equity in the workplace and in government contracting.

“The rollback of DEI initiatives undermines critical legal precedents established to address systemic discrimination,” said Thomas A. Saenz, President and General Counsel of MALDEF, Mexican American Legal Defense and Education Fund. These moves are about reinforcing historical discrimination, rather than supporting fair and equitable practices.. 

However many organizations that eliminate their DEI efforts may find themselves open to lawsuits if they continue to engage in biased hiring and admissions practices. Anti-discrimination laws and affirmative action policies are still in effect. 

Policies with a discriminatory effect can be challenged legally.