President Donald Trump signed an executive order targeting government contracts and subcontracts with companies participating in diversity, equity and inclusion (DEI) hiring initiatives on March 26.
The executive order mandates that all contractors and subcontractors must not “engage in any racially discriminatory DEI activities” in order to keep contracts with the federal government once it takes effect 30 days after it was issued. If companies are found to have not complied, their contracts can be suspended, canceled or terminated fully or partly and they can be named ineligible for additional government contracts.
“DEI activities are not only unethical and illegal, but also cause inefficiencies, waste, and abuse within entities that engage in such practices,” the executive order reads, adding that DEI programs create additional costs for services that then cost the taxpayers.
White House Press Secretary Karoline Leavitt highlighted the executive order in a post on X, adding that the administration was working toward “ensuring merit-based and efficient contracting and employment.”
President Donald J. Trump signed an Executive Order eliminating racially discriminatory “diversity, equity, and inclusion” (DEI) practices by Federal contractors and their subcontractors, ensuring merit-based and efficient contracting and employment.https://t.co/kE84UAMgWQ
— Karoline Leavitt (@PressSec) March 27, 2026
Companies must also turn over any information and reports, including records, accounts and books, based on the demands of the agency contracting them for compliance purposes, according to the executive order.
“We will terminate every diversity, equity, and inclusion program across the entire Federal Government,” Trump vowed, according to a White House fact sheet. The release also highlighted some of the presidents recent policies cracking down on DEI initiatives, including in the military, the State Department’s Foreign Service and schools. (RELATED: EXCLUSIVE: DEI ‘Doomsday’ Policies Infected Biden-Era Climate Research)
The Trump administration has continued to probe suspected DEI practices. The Department of Housing and Urban Development (HUD) announced an investigation into alleged “race-based” mortgage loans on Thursday. The Covenant Homeownership Program in Washington state did not give out loans based on “low-income” status, but asked for applicants to list any “parent or grandparent of black, Hispanic, Native American, Pacific Islander, or Indian descent” in order to qualify,” according to the department.
“Persons of European, Japanese, Arab, or Jewish ancestry do not appear to qualify,” HUD continued.