DEI: Trump administration tells EU companies to follow US law

Trump administration requiring European companies to certify DEI programs comply with US anti-discrimination laws, mirroring EU's demands on US companies.

Key points: Trump administration requiring European companies to certify their DEI programs comply with US anti-discrimination laws. This mirrors EU's demands on US companies regarding data protection and AI.

Why this matters: The letter has made it a lot more complicated for European companies to do business in the US and play by US rules. This also applies to US companies in Europe, being pulled in two different directions by increasingly diverging EU and US laws. 

Our take on this development: While there has been a hostile reaction to the letter in French business and political circles, is this really any different from the demands placed on US undertakings operating in Europe by the EU’s CSRD/CSDDD due diligence laws? These laws open undertakings in scope to massive fines if they get things wrong.

If the EU can demand that undertakings operating within its borders play by European rules, can the US not also do the same? The fact that many, we included, find the Trump administration’s stance on DEI objectionable does not take away from its authority to insist that undertakings doing business with the US government abide by its terms and conditions. 

What might happen next:  The ETUC has written to the Chargé d'Affaires of the US Mission to the EU requesting that the letter be recalled, saying it contains, in the assessment of the ETUC, “an unlawful request.” Whatever about that, the move could lead to increased scrutiny of European companies' DEI practices in the US and potential legal challenges if compliance is not met.