The Imams of the Ahlulbait (peace be upon them) have interpreted the food that is mentioned in the verse: “The food of those who have received the Scripture is lawful for you” to be grains and such food which do not have the requirement of religious slaughtering. Meat is not included in this verse, as it is unlawful to consume it unless some special conditions are met, and there is no doubt that those conditions are not met in the meat in western countries. The embarrassment or awkwardness that this law causes when dealing with non-Muslims is not a justified excuse to consume prohibited food, and it can be avoided by explaining the reason in a nice and a calm way.
It is permissible to communicate with such people because there is a possibility that they might come back to the right path as a result of such ties. However, in some cases such communication encourages them to do wrong. Then, it becomes prohibited.