White House scrambles for 'damage control' as report pins job losses on Trump policy

U.S. President Donald Trump holds an executive order about tariffs increase, flanked by U.S. Commerce Secretary Howard Lutnick, in the Oval Office of the White House in Washington, D.C., U.S., February 13, 2025. REUTERS/Kevin Lamarque//File Photo

One of the President Donald Trump's top economic advisors is scrambling to blame anything but tariffs after a new jobs report indicated that they might be 'hammering" small business jobs, a move the New Republic dismissed as "only damage control."

“No, no, it’s not tariffs,” Lutnik told CNBC’s Sara Eisen. “Remember, you had the Democratic shutdown, right, and what do you think happens to small business, the people who do business with the U.S. government, they know they’re not getting paid, so they slow down their projects.

“Remember, as you deport people, that’s gonna suppress private job numbers of small businesses," he added. "But they’ll rebalance and they’ll regrow, so I think this is just a near-term event, and you’ll see as the numbers come through over the next couple of months, you’ll see that all pass."

Reacting to Lutnick's claims, a report from the New Republic dismissed them as "damage control" and cited numerous other factors to back up the claim that tariffs are harming the U.S. economy in ways Trump said they would not.

"Domestic manufacturing, as measured by the Institute for Supply Management Manufacturing index, fell for the ninth month in a row, showing that the tariffs are hurting an area that Trump boasts they will improve," the piece explained. "And private companies, including wholesale retailer Costco, are suing the government to get a refund of the tariffs they’ve paid.

The report from ADP found that, for the month of November, private sector businesses employing at most 50 people saw job losses of nearly 32,000. This was notably off from the initial prediction that these businesses would add 10,000 new jobs. Small businesses, those that employ at most 50 people, were hit the hardest, losing 120,000 jobs. Medium-sized businesses, meanwhile, added 51,000 jobs, and largest businesses added 39,000, all of which was still not enough to create net positive job growth.

Reporting on these new numbers, CNBC host Steve Liesman said that Trump's tariffs may be to blame for some of the pain felt by small businesses.

"That's the fourth negative number in the past six months," Liesman said. "The estimate was for plus 40,000, so the street was off on this one... Small business getting hammered and there is some information that some of this may be coming from being hammered by the tariffs."

During an appearance on CNBC later in the day, Trump's Commerce Secretary denied the theory that tariffs were to blame, instead putting the onus on the administration's preferred target: Democrats.

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