How to add the external to be trusted external.

Add the external organization’s domain to the Teams external-access allow list, then ensure both your users’ policies and the other organization permit the federation.

Allow the external organization

1. Sign in to the Teams admin center.
2. Go to Users → External access.
3. Under Teams and Skype for Business users in external organizations, select Allow only specific external domains.
4. Select Add external domains.
5. Enter the organization’s domain—for example, contoso.com—and select Done.
6. Add any other required domains, then select Done or Save.

Selecting Allow only specific external domains blocks every domain not included in the allow list. External access permits chat, calls, and supported meetings without adding those people as guests to your tenant. It does not provide access to your teams, channels, sites, or other Microsoft 365 resources. ^1^

Check the user policy

External access must be allowed at both the organization and user-policy levels:

1. In Teams admin center, go to Users → External access.
2. Open the Policies tab.
3. Select Org-wide default settings, or open the custom policy assigned to the relevant users.
4. Enable meetings and chat with other Teams organizations.
5. Select Save.

If only selected employees should communicate externally, create a custom policy from Users → External access → Policies → + Add, enable external access, save it, and assign it to those users or groups. Organization-level settings can override what a user policy permits. ^1^

Required configuration at the other organization

The external organization must also:

• Enable external access for its users.
• Allow your organization’s domain.
• Assign policies that permit its affected users to use external access.

If it does not reciprocally allow your domain, authenticated external chat and calling will not work. ^1^

If these are personal or unmanaged Teams accounts rather than users from another Microsoft 365 organization, use Users → External access and enable People in my organization can communicate with unmanaged Teams accounts instead. Optionally allow unmanaged users to initiate conversations with your users. This capability is unavailable in GCC, GCC High, DOD, and private-cloud deployments. ^1^

References

1. IT Admins - Manage external meetings and chat with people and organizations using Microsoft identities