19 Mar Trump’s DEI Bans Threaten to Roll Back Progress for Minority Businesses

President Trump’s executive orders against diversity, equity and inclusion could have many consequences for minority business owners like Sierra Georgia, seen speaking on a 2023 small business panel discussion. (Screenshot captured by Danielle Parenteau-Decker / The CC Pulse file)

By Malcolm Marshall

Diversity, equity and inclusion programs were created to help level the playing field for communities that have historically faced barriers in the workforce. But now, under the Trump administration, these programs are facing unprecedented cuts, with federal contractors ordered to cease promoting diversity.

“The attack on so-called DEI, or diversity, equity and inclusion, is actually an attack on American entrepreneurship,” said Dilawar Syed, former deputy administrator of the Small Business Administration under President Biden. “And, unfortunately, this is just the start.”

Syed shared his thoughts at a March 7,Ethnic Media Services news briefing to examine how these changes could harm minority-owned businesses. The panel also featured Dr. Esther Zeledon, founder of BeActChange; Thomas A. Saenz, president and general counsel of MALDEF (Mexican American Legal Defense and Education Fund); and Elizabeth Barrutia, president and CEO of Barú.

Syed highlighted what he described as a historic rise in entrepreneurship, particularly among communities of color, following the 2022 passage of the CHIPS and Science Act.

“As an example, Black women are starting businesses at four times the rate of any other American,” he said.

This trend, Syed said, reflects an unmet demand for entrepreneurship in the U.S., especially among Hispanic, Asian and veteran communities.

“We responded to that with these programs to make sure there’s access for capital through regional banks and community banks who actually bank with these communities,” Syed said, “that there are mentorship program that we’re doing in partnership with ethnic organizations that actually engage with our communities.”

However, Syed warned that the Trump administration’s rollback of these programs could reverse much of this progress.

“What that means is that the unmet demand for services to build your business, to grow your small business, to have access to SBA loans, to have language support, and to have access to lenders in your communities who actually provide SBA loans, that is going to dry up,” he said.

In addition, the relocation of SBA offices in cities with sanctuary city laws further exacerbates these concerns. Earlier this month, new SBA Administrator Kelly Loeffler announced the closure of offices in six cities. Syed emphasized the economic impact, noting that these cities are disproportionately home to minority entrepreneurs.

“That doesn’t help us serve the unmet needs of this rising class of entrepreneurs,” he said.

Syed also pointed to the Trump administration’s rollback of federal contracting opportunities for minority entrepreneurs

“The United States government spends $700 billion a year on federal government contracts,” he said. “We had a goal in our administration to make sure 15% of that spend goes toward minority entrepreneurs who want to do contracting with government.”

And it made significant strides toward that goal.

Syed continued, “Federal government contracting presented a great opportunity for minority entrepreneurs, particularly in the Asian, African American and Hispanic communities. We achieved 13% of that target, and I personally played a role in ensuring that nearly $90 billion in federal contracts were awarded to minority-owned businesses.”

Under the current administration, however, the target for minority contracts has been slashed to just 5%. Syed warned that this change would have devastating effects on minority-owned businesses and their employees.

“That means literally hundreds and hundreds of minority small businesses and small contractors — women contractors, veteran contractors — working with the federal government will not have contracts and will effectively shut down, impacting thousands of workers.”

Barrutia expressed concern about the broader impact of DEI dismantling on her marketing and advertising firm, Barú, noting that it could have ripple effects throughout the ecosystem her company relies on.

“I think that what’s happening with the dismantling of DEI is effectively going to attack everything that we do,” said Barrutia.

Her agency, which specializes in connecting with diverse audiences, has been involved in several projects to support underserved communities. These include California’s vaccine campaign, efforts with Planned Parenthood to expand access to reproductive health services for immigrant populations and women of color, and collaborations with organizations like Covered California to ensure access to affordable healthcare.

“All of these issues are under attack right now,” Barrutia said. “This affects people like me, owners of these businesses and all of my employees. I have 32 of them… all of my employees are minorities.”

Barrutia also expressed concern about how the changes could impact the media landscape, which would, in turn, affect consumers.

“If I don’t have contracts coming in, if I don’t have advertising solutions, then the media landscape is also going to be affected,” Barrutia said, “meaning my diverse suppliers, like broadcast and television stations, print outlets, digital publishers or content creators.”

She added that these relationships were previously supported by policies and regulations that required a certain percentage for minorities even in media services contracts.

“So what happens is that when the minority outlets are not getting the percentage of allocation of dollars from marketing, that means that the messaging is affected for the larger consumers,” she said. “There are downstream consequences for the audiences who are not getting a lot of messages, especially when there are programs being offered that are supposed to help the underserved.”

Saenz says that it’s clear to him this administration’s attack on DEI is entirely about perpetuating and even expanding long-standing practices that discriminate in favor of white men.

“That’s what this is about,” said Saenz. “It’s about going backward to a time when discrimination in favor of white men was much more widespread than it still is today.”

He argued that the attack on DEI could set back efforts to eliminate discrimination. “We need to use the law to challenge practices that have discriminatory effects and may be motivated by discriminatory intent, like the Trump administration’s attack itself on DEI. That’s what we face.”

Saenz said the appropriate response to discrimination is to confront it wherever it arises as such challenges are essential to overcoming the intentional and systematic favoritism toward white men.

Zeledon, founder of BeActChange, is concerned with the disparaging language used by the Trump administration when speaking about DEI.

“That type of language, what that says is that basically all the efforts we’ve done with DEIA were ‘wasteful and radical,’” she said, referring to diversity, equity, inclusion and accessibility. “It politicizes it and it’s also saying that all of it didn’t have a positive outcome. So it puts a mistrust right into the people who have benefited from the programs and also to people who work in those fields or represent that.”