WASHINGTON, Aug 18 (Reuters) - With U.S. President Donald Trump increasingly isolated over his response to white nationalist violence in Virginia, Secretary of State Rex Tillerson issued a broad condemnation of racism on Friday and promised to make his department more racially diverse.
Trump is facing a widening backlash among fellow Republicans, business leaders and even sports stars since the violence last Saturday in the Virginia city of Charlottesville arising from a rally by white nationalists. The crisis could further imperil his policy agenda, which includes tax cuts.
Tillerson invoked the 1865 second inaugural address by Abraham Lincoln, the president who freed the slaves and presided over the Civil War against rebellious pro-slavery Confederate Southern states. As the war drew to a close, Lincoln asked the nation to bind up its wounds from the conflict, Tillerson noted.
"We, too, today should seek to bind up the wounds," Tillerson told participants in a State Department fellowship program. "We must pursue reconciliation, understanding and respect regardless of skin color, ethnicity or religious or political views."
Tillerson, who was CEO of oil giant Exxon Mobil Corp before becoming secretary of state this year, said one of America's defining characteristics "is the promise of the opportunity for advancement regardless of your skin color, how much money your parents make or where you came from."
He announced a new State Department policy in which at least one candidate for any opening for an ambassador post must be a minority, noting that currently only about 12 percent of U.S. senior foreign service officers are non-white.
Tillerson did not mention Trump's comments on the Charlottesville violence, which erupted as white nationalists protested the removal of a statue of Confederate General Robert E. Lee.
Trump blamed the violence on not just the white nationalist rally organizers but also on anti-racism counter-protesters, and said there were "very fine people" among both groups. He decried the removal in numerous cities of "beautiful" Confederate monuments.
A man described as having an infatuation with Nazi ideology was charged with murder after authorities said he drove his car into the counter-protesters, killing a woman.
"The State Department must redouble our efforts to increase diversity at the highest ranks of the department, including at the ambassador level," Tillerson said. As the arm of government representing the United States abroad, the department should be a "clear display of America's values and our people, not just in our mission but in the composition of our work force," he added.
He also quoted one of his predecessors, Condoleezza Rice, who was secretary of state under Republican former President George W. Bush and the first black woman to serve in the post.
The controversy over Trump's Charlottesville remarks has dented investor confidence that he can implement his economic agenda any time soon. The S&P 500 index posted its biggest one-day percentage loss in about three months on Thursday.
On Friday, U.S. stocks reversed course, pulling back from earlier losses, after a report by news website Axios that White House senior adviser Steve Bannon could exit soon. The S&P was last up 0.1 percent. A decision from White House Chief of Staff John Kelly is imminent on whether Bannon will keep his job, Axios said.
Newt Gingrich, a Republican former speaker of the House of Representatives who has been a prominent Trump supporter, said the president needs to readjust his strategy to try to win over alienated allies. Republicans control both the Senate and House.
"I think he is in a position right now where he is much more isolated than he realizes," Gingrich told the Fox News program "Fox and Friends." In Congress, "there's far more people who are willing to sit to one side and not help him right now, and I think that he needs to recognize that," he added.
Sixteen members of the President's Committee on the Arts and the Humanities, an advisory committee on cultural issues composed of federal agency heads, scholars and artists, resigned on Friday in protest against Trump's Charlottesville remarks.
"The false equivalencies you push cannot stand," they said in a resignation letter. "The Administration's refusal to quickly and unequivocally condemn the cancer of hatred only further emboldens those who wish America ill."
The advisory panel was created by Republican President Ronald Reagan in 1982.
Two presidential business advisory councils were disbanded on Wednesday after numerous chief executives from major companies quit following Trump's remarks. The White House said on Thursday it would not go ahead with a planned presidential advisory panel on American infrastructure.
In another sign of high-profile organizations not wanting to be associated with Trump, the American Cancer Society advocacy group and the pro-Israeli medical charity American Friends of Magen David Adom joined the world-renowned Cleveland Clinic in cancelling events planned at Trump's Mar-a-Lago Florida resort.
Basketball star Kevin Durant, who is black, said he would not go to the White House if his Golden State Warriors are invited for a customary celebration for the National Basketball Association champions. Durant said he does not respect Trump and believes the president is exacerbating racial tensions.
Reporting by Steve Holland and Susan Heavey; Additional reporting by Makini Brice, Richard Cowan, Caroline Valetkevitch, Deena Beasley and Gina Cherelus; Writing by Will Dunham; Editing by Frances Kerry