US embassies tell suppliers to comply with Trump ban on diversity policies

MADRID/WASHINGTON (Reuters) -The Trump administration has warned suppliers to U.S. embassies and consulates as well as recipients of U.S. grants worldwide that they must comply with its ban on Diversity, Equity and Inclusion (DEI) programmes or risk losing payments.

Suppliers for U.S. diplomatic missions have been told to confirm compliance with the DEI crackdown in a questionnaire entitled "Certification Regarding Compliance With Applicable Federal Anti-Discrimination Law", according to a copy reviewed by Reuters.

Separately, a letter sent to those firms warned that failing to submit the required information and confirm compliance will result in a payments freeze, a Spanish official said.

The warning reflects U.S. President Donald Trump's goal to extend outside the U.S. his January executive order directing U.S. government chiefs to dismantle DEI policies for their agencies and contractors and for the private sector to do the same.

This has created a legal standoff in the U.S. after years in which American firms have embraced DEI policies that track race and ethnicity data and set diversity targets in hiring and other corporate practices.

A February 11 cable sent to all U.S. missions worldwide reviewed by Reuters instructed them to obtain from vendors with current contracts or proposals under review the certification that they are adhering to Trump's DEI ban.

They also must certify that they will not spend U.S. funds "for any initiatives or programs that do not comply" with Trump's order, according to the cable.

Asked about the issue, U.S. State Department spokesperson Tammy Bruce told reporters on Monday that the notifications were "an effort to comply with the executive order from the president, and it is (an) essentially self-certifying statement to local consulates and embassies."

Reuters has been unable to establish how many companies have received letters or how much their combined contracts are worth.

But the anti-DEI pressure from Washington has highlighted the extraterritorial reach of U.S. policies and their potential impact on European corporate practices.

Other "America First" policies pursued by Trump have stoked economic and political tensions between the U.S. and Europe since his January 20 inauguration, at a time when his actions on tariffs and security ties have upended transatlantic relations.

'FLAGRANT VIOLATION' OF LAWS, SPAIN SAYS

The instructions have been sent to a wide range of firms, the Spanish official said, including those supplying the homes of U.S. embassy staff with water, gas and electricity, to newspapers to which embassies subscribe, and catering suppliers.

The Spanish Labour Ministry said the American directive was a "flagrant violation" of Spain's strict anti-discrimination and diversity laws, and companies seeking to comply would face investigation by the Labour Inspectorate.

American Space Barcelona, based at the Spanish city's Sant Andreu municipal library, is one Spanish organisation to have received the letter as it includes a project that gets U.S. Embassy funds. The project provides English-language resources, cultural programmes and educational guidance and information about the United States.

Barcelona Mayor Jaume Collboni told media the letter was part of a "reactionary avalanche" being driven by the Trump administration "against Europe and the democratic values that we defend".

Major German carmaker BMW has received a letter from the U.S. Embassy in Bulgaria, which has bought BMW vehicles, asking it to address questions about its DEI policy, a person familiar with the matter said.

In a statement to Reuters, BMW said it believes that "diverse perspectives and talents strengthen our company" and "contribute to increasing our innovative strength and competitiveness".

"Discrimination in any form has no place in our company," it said. "We will continue our activities on ESG (environmental, social and governance) topics as planned. We do not follow short-term trends in these areas either, but pursue a clear plan of moderation and balance."

Some French companies with U.S. government contracts have also been ordered to comply with Trump's DEI ban.

"American interference in the inclusion policies of French companies, along with threats of unjustified tariffs, is unacceptable," France's Ministry of Foreign Trade said in a statement sent to Reuters last week.

(Reporting by Aislinn Laing and Christina Amann in Madrid and Jonathan Landay in WAshington; additional reporting by Humeyra Pamuk and Patricia Zengerle in Washington; writing by Charlie Devereux; editing by Mark Heinrich, Don Durfee and Stephen Coates)