During the Covid-19 pandemic, people strongly rallied around political institutions, producing an unprecedented high level of trust into politics. This high level of trust is a crucial foundation for democratic societies’ abilities to tackle the health crisis. In this paper, we argue that social context determines people’s abilities to overcome collective action problems, which, in turn, shapes the extent of the rally effect. Specifically, we propose that local ethnic diversity reduces people’s willingness to trust each other and that therefore a rally effect during the pandemic is restricted to ethnically more homogeneous contexts. We test this argument with geo-coded household panel data from the Netherlands that covers the period before and during the first Covid-19 wave. Models of individual level change show strong increases in political trust as the pandemic hits, but only for respondents residing in ethnically homogenous areas. In contrast, people from ethnically highly diverse contexts maintain their low levels of trust over the course of the pandemic. These findings suggest a deeply entrenched geography in people’s willingness to trust, which is shaped by ethnic divides and is even maintained under exceptional crisis events, such as a global pandemic.