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The Lead with Jake Tapper

Trump's New Threat To Iran; FBI Says It Foiled ISIS-Inspired Terror Plot; More Measles Cases Reported; Tariffs Prompt Portland Eyewear Company To Raise Prices; New Storms Bring Risk Of Flooding, Mudslides In California. Aired 6-7p ET

Aired January 02, 2026 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[18:00:00]

PHIL MATTINGLY, CNN HOST: Welcome to The Lead. I'm Phil Mattingly in for Jake Tapper.

This hour, President Trump issues a new threat warning Iran that the U.S. is, quote, locked and ready to go and will forcibly intervene if Iran shoots and kills protesters. But what does that actually mean? Will U.S. troops actually get involved and how soon could it happen?

Plus, the FBI says a teenager has been arrested, accused of planning to carry out a terror attack in North Carolina on New Year's Eve. The plot allegedly inspired by ISIS. What we're learning about this 18- year-old and what the FBI says it found inside his bedroom.

Also alarming new data about the spread of measles in the United States, more than 2,000 cases were reported last year. And now multiple outbreaks are spreading again. Are there any signs the U.S. is making progress on getting this under control and?

After a week of stunning college football wins, the semifinals of the college football playoff are now set. So, who's favorite to win at all and which players should we be keeping an eye on? That's ahead.

The Lead tonight, Iranian officials say, U.S. troops will not be safe if they interfere in the explosion of protests across Iran. This after President Trump issued a late night warning saying if Iran shoots and kills peaceful protesters, quote, the United States of America will come to their rescue. We are locked and loaded and ready to go.

Now, some clashes with police have already turned deadly as shopkeepers, merchants and students take to the streets with Iran's currency hitting record lows. It's the biggest protest since the 2022 uprising after Mahsa Amini was killed in police custody for allegedly wearing her headscarf improperly.

We start things off with CNN's Kevin Liptak in West Palm Beach. And, Kevin, what are you hearing from U.S. officials about what the president actually means here?

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes. And what we've heard today is that no U.S. troops have been moved as part of this. Their preparation levels haven't been increased. What one White House official told us was that this was intended as a strong warning but that the president hasn't taken any action yet.

So, as of now, it's not precisely clear what is actually locked and loaded, as the president put it in that 3:00 A.M. Truth Social post. When you talk to officials they do say that there are some hypothetical options here for the president to take, you know, that would stop short of actually firing a missile into Iran. One would be similar to what President Biden did during those 2022 protest, which is to use American technology to kind of bolster the internet connectivity, to try and find a way to get around some of the regime's crackdown on information.

You also hear talk potentially about sanctions on figures in the regime, potentially on, you know, the oil or banking industry, although Iran already has a heap of U.S. sanctions on it, so it's not clear what effect those would have. You also hear hypothetical discussion of potential cyber action. And, you know, the US has used cyber attacks previously on Iran to kind of stymie some of the regime's efforts. And so, you know, a lot of potential options, hypothetical options for the president to take here, but not specifically clear what he's talking about being locked and loaded.

What I do think is clear is that the president has shown that he has an appetite for risk in Iran that his predecessors didn't necessarily share. You know, just showing support for these protesters at all is more than, for example, what Barack Obama did in 2009. He essentially said nothing about the street protests that were taking place in Iran at the time, fearful that it could have led pretext for the regime to claim that they were all backed by the west, and so President Trump clearly going further here than many of his predecessors have done.

Now, it has drawn backlash, certainly from the regime in Iran who has said that the U.S. forces in the region could be a target if the U.S. intervenes. It's also drawn some backlash from some Republicans, Marjorie Taylor Greene, by now a fierce critic of President Trump's, wrote on social media that Trump threatening war and sending in troops to Iran is everything we voted against in 2024.

MATTINGLY: I believe she's a member of Congress for three more days.

Kevin Liptak in Florida, great reporting, as always, my friend, thanks so much.

Also in our World Lead, four years into Russia's brutal war on Ukraine, President Volodymyr Zelenskyy says he's holding a first of its kind meeting with national security advisers tomorrow in Ukraine, along with European American and NATO representatives on the hopes of getting closer to a deal to end the war. This as Russia pounds Ukraine's energy infrastructure with drones and missiles, hits residential areas as well, according to Ukraine. It's deploying its usual tactic of making winter as harsh as possible for the Ukrainian people.

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I'm joined now by Ukrainian Ambassador to the U.S. Olga Stefanishyna. I really appreciate your time. Just to start with, Madam Ambassador, President Zelenskyy says some peace plan documents could be ready for signing as soon as this month. How confident are you that a peace deal could be imminent?

OLGA STEFANISHYNA, UKRAINIAN AMBASSADOR TO THE U.S.: Well, I think there's no question from anybody, including after the meeting, last meeting between presidents in Florida, that Ukraine is in no case will become an obstacle to any peace agreement which will secure Ukraine sovereignty, but also will have a clear backup of the security guarantees.

Just as we're speaking, our teams continue working and we have a team of Ukrainian officials who have no other job to do but to be engaged in forming the peace deal into the reality 24/7. So, it was the expectation from both presidents after the meeting that January should become the months when the major agreement could be finalized. Because as it was mentioned by my president, 90 percent of, you know, bases have been settled already.

MATTINGLY: You mentioned the meeting between the presidents on Sunday in Florida. You attended the meeting. How receptive was President Trump to your team? It's been a bit of a rollercoaster of a relationship. But it seemed coming out of the meeting that it had been in a fairly solid place.

STEFANISHYNA: Well, I wouldn't say like a rollercoaster, but I think this was like -- was one of the most substantial, constructive meeting and the leaders, both President Trump and the president of Ukraine were digging deeply into so many details. And I think there was a major understanding form that the security guarantees from European allies and potentially from the United States is not part of Ukraine's wish list, but it's an inevitable part of the general peace deal, also just forcing and securing the implementation of the deal all by Russian side, the aggressor. And I think this is very important and I think this is one of the major outcomes of the meeting.

Other than that, I think the dynamics has changed a little bit because between the two meetings over just last two months, we had a 24/7 dialogue at the leg level of the teams, which has been structured and there's been a lot of details into the discussion. And I think it was very helpful and also the call between presidents of Ukraine and U.S. and European leaders have brought a lot of more clarity in terms of, you know, where we stand and what is the commitment on European side as well.

MATTINGLY: Just this afternoon or over the course of the last several hours, President Zelenskyy announced some pretty significant changes on the personnel side of things. He appointed Ukraine's spy chief as his chief of staff, proposed a new defense minister. Explain the significance of these changes heading into this year.

STEFANISHYNA: Well, I mean, this is very, very significant changes in the in the management, in the closest circle around president of Ukraine. And also this -- Kyrylo Budanov was the chief of military intelligence to become the chief of president's office. He has been the major person behind the exchanges of prisoners of war. He would also be looking into other exchanges with the civilians and he has been engaged in the peace process and the war process and Ukraine's defense since the very first day.

And this is also explained by president of Ukraine when he announced this appointment that this gives the priority to doing and constantly making sure that Ukraine is capable to defend itself, that Ukraine can kick back (ph), and Ukraine is capable to reach the agreement of ending the war as a priority. So, there's no other priority by that. With that understanding, that means that the government would have to do its own job. The parliament would have to do its own job. And the president and the people around here will be concentrated around that.

MATTINGLY: Ambassador Olga Stefanishyna, I really appreciate your time. Thank you so much.

STEFANISHYNA: Thank you.

MATTINGLY: What we're learning about the 18-year-old suspect tonight after the FBI says it foiled an ISIS-inspired terror plot in North Carolina. That's next.

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MATTINGLY: In our Law and Justice Lead, the man accused of being the Washington, D.C., pipe bomber will remain in jail until he faces trial. A judge ruling today to keep Brian Cole Jr. behind bars despite the defense arguing Cole should be released into his grandmother's custody.

Now, Cole allegedly placed explosives outside the Democratic and Republican National Committee buildings on January 5th, 2021. He has not yet entered a plea to the charges and a trial date has not yet been set.

Well, also in our Law and Justice Lead earlier today, the FBI announced it foiled an alleged ISIS-inspired New Year's Eve attack near Charlotte, North Carolina. An 18-year-old is under arrest accused of planning to carry out a terror attack using knives and hammers.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The defendant here is an 18-year-old named Christian Sturdivant. He was planning this attack in support of ISIS and we have charged him with attempting to provide material support to a foreign terrorist organization.

(END VIDEO CLIP)

MATTINGLY: The federal officials say the suspect talked online with those he believed were two ISIS members.

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They were actually undercover FBI agents.

I want to bring in Donell Harvin, the former chief of Homeland Security and Intelligence for the Washington, D.C. government. And just to start with, the suspect known to the FBI, he was on the radar in 2022 when he was 14 years old for a separate incident involving ISIS. That investigation ended because the FBI said the suspect was seeking mental health services and was no longer on social media. Three years later, the suspect now accused of planning an ISIS- inspired attack. What do you make of the suspect, how he was described and how the FBI thwarted this attack?

DONELL HARVIN, FORMER CHIEF OF HOMELAND SECURITY AND INTELLIGENCE, D.C. GOVERNMENT: Well, there's two things. One, it should not come at a surprise for the viewers that people as young as 14 are being sought out by ISIS and Al-Qaeda and other jihadist groups for radicalization. I've seen cases as young as 12 years old. These individuals can be radicalized on video games and chat rooms. They're easy to manipulate. They get fed this content, this very violent content, which really is traumatizing for many of these young minds, and they often repost that to other individuals. In doing so, they seek out a community of like- minded people.

This individual, it doesn't sound like was really quite operational, but that doesn't matter. At the end of the day, you can kill somebody with a knife or a hammer. We've seen this in other terrorist attacks in other countries. And so having him off the playing field, so to speak, from a counterterrorism standpoint, it's quite important.

The last thing I'll say is that also understanding the networks, how he was radicalized, what website he was on and who was manipulating him is going to be really key, particularly if they're U.S. citizens and on the homeland front -- homeland soil.

MATTINGLY: Yes, it's really critical context here. And to an earlier point you're making, the FBI says it found hammers, knives hidden under the suspect's bed, handwritten notes about the alleged plot, a list of targets, details about what he'd wear. To this point, he's only been charged with attempting to provide material support to a terrorist organization.

Explain to people where does the investigation go from here, considering it seems like prosecutors are looking into additional charges.

HARVIN: Well, that's a serious enough charge from my understanding. He can get significant time convicted on that. But as the investigation unfolds and they're able to delve more closely into his networks, other information that he shared online, maybe people he was collaborating with, if there was a more viable plan or if there was a target, there could be more charges. This is really unfolding rapidly in front of our eyes, and so we'll hear more certainly from the FBI as it goes.

But this may not be the end of charging for this individual or other individuals. You know, look back to the October thwarted Halloween plot where it started from one state, Michigan, and it spread to other states. Similar to that happened here.

MATTINGLY: I want to dig in a little bit more again, the FBI noting that the serious danger from those who become radicalized online. Take a listen.

(BEGIN VIDEO CLIP)

JAMES C. BARNACLE JR., SPECIAL AGENT IN CHARGE, FBI OF NORTH CAROLINA: We have seen that most successful attackers radicalize in a time span of between one and four years, and they typically mobilize to act in less than three months.

(END VIDEO CLIP)

MATTINGLY: Your assessment of the timeline laid out here?

HARVIN: This is something, you know, we've studied extensively. We don't really understand. We understand the pathways to radicalization. We understand the pathways to violence. But the mobilization, some people, it takes years to mobilize to actually do a violent act and some people can do so very quickly. It really all depends on who's radicalizing them, how well mentally developed they are, and that's really key.

That's why these jihadist groups are targeting young people. I mean, look, just back into October. There were several teenagers, 16 and 18 years old, that are now behind bars and being -- ready to go on trial for attacking Halloween festivities. And so, you know, it is a concerning thing. Unfortunately, we're starting out the year like this.

But I have to mention, this time last year, we were actually -- look, we were actually talking about a terrorist attack that killed 14 people on Bourbon Street and injured almost 50 others. And so kudos to the law enforcement, not just the FBI, we mentioned the FBI, but also the local law enforcement. NYPD played a huge role in this and first detecting this individual and then involving other federal officials through the Joint Terrorism Task Force. They're on the job. They're looking out for individuals like this, but, unfortunately, they're more and more springing up every day.

MATTINGLY: Yes. Those days where it feels like whack-a-mole, but certainly a much better outcome this time around than what you mentioned in New Orleans last time, last year.

Donell Harvin, I really appreciate your time, my friend. Thanks so much.

Well, new measles cases were reported today as an outbreak grows in South Carolina, but that's not the only state where dozens of new cases are being reported each week.

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The growing concern about more outbreaks, that's next.

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MATTINGLY: Some alarming new numbers in the Health Lead, the CDC tracking more than 2,000 known measles cases in 2025. This year, it's not starting off any better. South Carolina is tracking a full-blown outbreak and others -- Massachusetts are out with warnings about possible exposures. Just how widespread has this highly contagious virus become?

JACQUELINE HOWARD, CNN HEALTH REPORTER: Phil, here in the United States, there were 49 measles outbreaks reported in 2025. Now, just to put that in perspective in the year 2024, there were only 16 outbreaks reported. So, this is what we're dealing with now in this country, this wide spread presence of the measles virus.

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And keep in mind, in the year 2000, measles was declared eliminated here in the United States. Elimination means there has been no sustained transmission of the same measles virus strain for at least a year. But because of the outbreaks that we saw in 2025 and the possibility of these outbreaks being linked, that's why the nation's measles elimination.

Now, we did ask the World Health Organization what exactly happens if the United States loses its measles elimination status. In a statement, WHO said this in October, quote, there are no formal consequences of losing measles elimination status. However, having measles again as an endemic disease will have a profound negative impact on communities, including preventable deaths among some of the most vulnerable population.

So, Phil, that's the consequence right there we might see more people sadly getting sick, sadly dying from a virus that was previously eliminated in this country. And in some cases, if a country loses its elimination status, it's asked to present an action plan, laying out how it might prevent future cases through vaccinations or how it might respond to outbreaks and contain them. So, we might see that in the future if the United States does in fact lose its measles elimination status. Phil?

MATTINGLY: Jacqueline Howard, thanks.

Here's a 2026 resolution, stop being idiots, like just goodness. Jacqueline Howard, thanks so much.

Only four teams are left in the hunt for college football's championship trophy. So, which is the favorite to win it all? That's next.

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MATTINGLY: In our Sports Lead, if you've learned anything from this year's college football playoff, expect the unexpected. The semifinals are set after several stunning games on New Year's Day. Next week, Oregon will take on top seeded Indiana and Ole Miss will face off against Miami.

I am personally dead inside as an Ohio State fan, and my soul has left my body. But the game last night was so good that I want to talk to the Stewart Mandel. I'm willing to consider watching more college football. Stewart's the editor-in-chief of The Athletics college football coverage, one of the absolute best in the business.

Stewart, in your latest write-up you described this moment is a changing of the guard. Again, this feels very painful for me to read on some level. What are some of the key takeaways you want people to understand going into the semifinals?

STEWART MANDEL, EDITOR-IN-CHIEF FOR COLLEGE FOOTBALL, THE ATHLETIC: Yes. Well, this is a sport as you know that has long been dominated by kind of a small circle of the most prestigious programs, which Ohio State would certainly be one, Georgia, Alabama. And this year we saw all three of those schools go down in the quarterfinals. And who's in their place? Indiana, like you mentioned, is the number one seed. Indiana has been one of the worst programs historically in the sport.

Here they are in the semis as now the team to beat. You have Ole Miss, hasn't won a national title since the early 60s. Their coach, Lane Kiffin, left them before the playoff to go to LSU. Here they are in the semis. Oregon's been good for a long time but have not won a national title to this point. And Miami used to be one of the dominant programs, but have been down for about 20, 25 years and now here they are back again.

MATTINGLY: Can I -- Indiana -- you're a Big 10 guy. Can we -- I don't think it's possible for people who maybe don't follow this as closely as you do or I try to like just how bad of a program Indiana was forever, like literally forever. And for them to do what they've done this year, as somebody with far more expertise in this than I have, like is there anything comparable across sports, not just in football, to what they've been able to do in the last 12 to 24 months, really?

MANDEL: I guess if you're an NBA fan, it'd be like if the Washington Wizards suddenly next year came out and were the NBA champions, something like that. But Indiana, up until Kurt Cignetti, their coach, got there last year, was the losingest program in history among the Power of Four conferences. They have been so good the last two years that they've moved out of that last place spot, but they're still pretty close to it. And they were pretty bad before Cignetti got there, the three seasons before that. Nobody can fully explain how they got in this position.

I think they would've been excited as Indiana fans to win nine games, go to a decent bowl. They're 14-0. And like I said, the odds on favor to win this thing now after the way they destroyed Alabama.

MATTINGLY: Yes. And to be very clear, again, I'm obsessive about this stuff, which is why I'm dead inside after Ohio State lost, watching the Big 10 championship game, like it was one of those light bulb moments of, oh wow. They are legit. They are very fast.

They have elite athletes, which I think people would always kind of say, well, they probably couldn't have the five star guys that the big conference powers have. Their defense was incredible and they have Fernando Mendoza. Who else kind of player-wise are you watching in the semis that's like Mendoza-level people need to keep their eyes on this person?

MANDEL: Mendoza won the Heisman but Trinidad Chambliss at Ole Miss I think finished in the top ten. But really overlooked nationally, I think, most of the season, he had a phenomenal game last night in the Sugar Bowl against Georgia, and he's one of those guys, he's just got that it factor. So, they go and they play a Miami team here in the Fiesta Bowl, who's been very dominant defensively in their first two games of the playoff.

And he's the kind of guy that could -- you know, like he did against Georgia last night several times, looked like they had him sacked, he escapes, he throws it downfield.

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He's got just an uncanny ability to escape pressure and throw downfield. So, that makes them a factor. Even though people weren't necessarily forecasting them going to the playoffs.

MATTINGLY: Also has a national championship under his belt in a different division, looked like a totally different quarterback in the second half of last night's game they did in the first game against Georgia, where it seemed like court kind of towards the end. He wasn't necessarily primetime ready. Last night was insane to watch.

All right, I got a little bit of time left. Tell America who the national champion is going to be so we can put a pin in it and tell you why you're wrong if you're wrong.

MANDEL: I can't pick against Indiana at this point. They've beaten Oregon once already. That's who they're playing in this next round. They beat number one Ohio State in the Big 10 and they just destroyed Alabama. They look like the best team. Anything's possible obviously. The other teams are very good as well, but they are definitely the favorite.

MATTINGLY: He's got the best mailbag in the business for the best in the business, period. Stewart Mandel, I really appreciate your time. Thanks so much.

MANDEL: Thank you.

MATTINGLY: Well, our small business series takes us to Oregon next, where an eyewear company says, despite doing much of its manufacturing in the U.S. is still struggling under the weight of Trump's tariffs. So, what does that mean, higher prices, layoffs? We're going to find out next.

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MATTINGLY: In our Money Lead, when it comes to the sour mood most Americans feel about the economy, there are two men that President Trump likes to blame, former President Joe Biden and Fed Chair Jerome Powell. Here are just some of the things President Trump has said about the Fed chair in the last few months.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: And I got a bad recommendation when I went with Jerome too late. You know, it's just he's too late. His nickname is too late.

This guy is a numb skull. He keeps the rates too high and probably doing it for political reasons.

I have to say this, I think he's terrible. I think he's a total stiff.

I'd love to fire him, but we're so close, you know? Maybe I still might.

(END VIDEO CLIP)

MATTINGLY: That was like a couple days ago. We've just been on this track and it's going to be big. this month, President Trump will, for the second time in his career, announce his pick for Fed chair. The first one was Jay Powell.

So, what does it mean for the economy when he makes that selection? Well, with me to discuss are two economic experts, former Trump Economic Adviser Steve Moore, former Director of the Consumer Financial Protection Bureau Rohit Chopra.

Steve, President Trump has also said, quote, anybody that disagrees with me will never be Fed chairman. Is it fair to share that once he gets a new Fed chair, for better or worse, that it's Trump's economy now?

STEVE MOORE, CO-FOUNDER, UNLEASH PROSPERITY: Well, first of all, I do think it is important that we have an independent Fed that is independent of politics but I also think it's important that we have a Fed that is competent and is not political. And some of the decisions that. Jerome Powell has made make one scratch their head and say, is he out to get Donald Trump? They've consistently underestimated the growth rate of the economy during Trump's reign, and they've also overestimated the inflation rate.

Look, we are going to get a new Fed chair sometime. I guess the announcement is coming soon and that new Fed chair will take office sometime in late spring and we'll see what happens here. But we've got -- the bottom line is we've got a pretty strong economy right now. We've got inflation headed down. It's not as low as we want it to be, Phil, but it's coming down.

MATTINGLY: Rohit, to Steve's point and from a broader macro perspective, the economy has held on. Look, this is -- I feel like we're on year five of people being like everything's about to collapse, and then the economy and consumers in particular remain far more resilient than people expected right now. What is your view of how much a Fed chair selection has to do with the broader U.S. economy? ROHIT CHOPRA, FORMER DIRECTOR, CONSUMER FINANCIAL PROTECTION BUREAU: Well, I think there's really two economies going on, one for those at the top, and then for the rest of everyone else. We saw this past year now the top 1 percent have one third of the entire stock market wealth. Meanwhile, the rest of the 90 percent have just a tiny share. They are falling behind on their credit cards. They are facing big cost increases on utilities more.

So, I don't know. I think whoever the Fed chair is, they're going to do what Donald Trump wants. We are already seeing the auditions play out, the sucking up. I think you are going to see people who really want to be a lapdog for him rather than a watchdog for the economy.

MATTINGLY: Steve, to Rohit's kind of broader point about the economy and what we've seen over the course of the last year or so, you know, kind of describing on some level the K-shaped economy, right, where wage growth for the kind of lower third -- lower two thirds of the economy has not been as robust as it has been for the higher end of the economy. And therefore when you see surveys, that's kind of the cohorts that are struggling the most. What can be done to address that in the near term?

MOORE: Well, I don't agree with the K-state -- K-shaped recovery at all. In fact, if you look at -- we have numbers that bottom 25 percent have actually had wage gains that have outpaced inflation this year. So, they're doing better, not worse. We just did a study showing the average family gained about $25,000 in their 401(k) plans.

It's not true that just the rich have stocks. I mean, my goodness, there's 160 million Americans who have 401(k) plans and other retirement plans in the market.

[18:45:05]

And, by the way, I've advocated for 40 years that we should allow every single worker in America to be in the stock market with the social security money going to a 401k plan. But nonetheless, I think that the economy is picking up.

And when people say that there's an affordability crisis and that and that and the consumer confidence numbers are low. And yet, if you look at what happened in the Christmas season, Phil, I mean, my God, there was $1 trillion of spending an all time high.

So what people are doing is different. And you know, what they're doing is very different than what they're telling pollsters about how they're feeling about things.

CHOPRA: But, Steve, they're charging all of that on credit cards and buy now, pay later. We saw record numbers. They paid $160 just in interest on their credit cards. You're saying that everybody is benefiting. Ninety percent of Americans just own 10 percent of those stocks.

And, you know, I served in both the first Trump administration and the Biden administration. MOORE: Sure.

CHOPRA: The problem is this when we gaslight people about how the economy is doing, it is very perilous. The reality is that people feel they are on a treadmill. They are racking up big debt, credit card delinquency for those who are seriously late, is at a 12-year high. Student loan delinquency has surged.

There are cost of living is going up. So, look, I want the economy to be on the right track. I don't want there to be a recession, but there are some serious challenges that we should not delude people about.

MATTINGLY: Steve?

MOORE: Look, I agree with that. But it's also true that real median family income, the people in the exact middle of the economy, saw about a $1,500 increase in their income this year. So, you know, but people tend to focus on the things that are going up in price, like housing and health care and beef prices. They seem to not be, Phil, looking at things like gas prices and, egg prices and hotel prices and airline prices that have been falling.

But look, I'm here to tell you, I think were going to have a blockbuster year in 2026. And hopefully, I think we'd all like to see a rising tide that lifts all boats.

MATTINGLY: Rohit, final word?

CHOPRA: Well, that seems like hope, but the reality is a lot of the policies of this first year have not turned out well. They said that the trade deficit would fall. It looks like it's increasing. They said unemployment would go down. It looks like it's increasing.

On almost every metric, a lot of people are feeling much more worried than they did a year ago.

MATTINGLY: I mean, the good news about this is were going to have a full year, and I'm probably going to be talking to both of you quite often throughout it, and I'm just going to keep checking -- I'm just going to keep checking back and forth.

Thanks to you both. I appreciate you both. Happy new year to you both.

MOORE: Happy New Year.

CHOPRA: Thank you.

MATTINGLY: Well, turning to our "Business Leaders" series, where we speak with small business owners from coast to coast about President Trump's tariffs, some optimistic, others not so much.

With us today is Jason Bolt. He's the CEO of Revant Optics, an Oregon- based eyewear company that designs and sells replacement lenses for sunglasses and prescription glasses.

Jason, really appreciate your time. Just to start here, top line, tell us more about your business and

kind of the impact you've seen over the course of the last year as tariffs have really settled into place.

JASON BOLT, FOUNDER & CEO, REVANT OPTICS: Yeah. Well, thank you so much, Phil. It's an absolute pleasure to be on the show today. Great way for us to kick off the new year. I love talking about the business we built here in Portland and American manufacturing. So, thanks again.

Sorry about your Buckeyes, by the way. Just want to put that out there.

So, I started at 15 years ago. Last year actually, we celebrated 15 years out of my dorm room at the University of Oregon. Got to "Go Ducks" in there. And I just found a really a big problem with eyewear in that every time the lenses would scratch, you'd have to buy a new pair. An expensive pair. Typically, if you have Ray-Bans or Oakleys or others.

So, I found a way to make replacement lenses affordably, really high quality and make them here in the U.S. and that was really the genesis of Revant.

Now speaking of the tariffs, they've had a substantially negative impact on our business really over the last year. We had to pay an additional $500,000 in increased tariff costs that we had not budgeted for because of the tariffs. And that $500,000 would go towards new jobs, new machinery, new technology, everything we need to build manufacturing here in America, which I'm really passionate about.

So that was a big hit. And then just the disruption to operations that comes from sort of the ebb and flow of, you know, is it going to be 100, 130 percent? How long are you going to last? What do we need to plan for?

It's kind of like dancing on quicksand. We can't really get our footing because there's no clarity or solid foundation. So, it's been a challenge for us this year.

MATTINGLY: I think that's always been my biggest question of, given the extent to which planning, forecasting, needing to have some sense of certainty going into quarters, just as a business, how do you do it? Like what is your process?

[18:50:00]

How is it changed?

BOLT: I'm going to give all credit to my team. I, you know, we've learned to be nimble. First, it was COVID and being a manufacturer during COVID, you know, was a very challenging thing to do here in the U.S. we did start manufacturing here in 2017. So we've been at this for a while now.

But it's just challenging that, you know, the shifting sands again around how do we plan, how do we budget, how do we forecast? We have a three-year plan. We want to go big. We want to bring manufacturing back to the U.S.

So, we plan three years out, and then every year we work against that plan with a budget, a hiring timeline, everything you do as a small business. Now, when that gets disrupted, for example, with a $500,000 increase we had to pay last year, we have to change our plans completely to stay in a healthy spot.

So, I give all credit to my team, especially the finance team, operations. Everyone involved in, you know, bringing materials in that we need to make our product here, making the purchasing decisions with machinery. We just have to remain nimble and kind of wait for things to come in right now, which is very challenging.

MATTINGLY: Yeah. There's no question about that. What have you seen from the consumer side of things? What's been really helpful in talking to business owners on the ground is, you know, we were just having a broader macro discussion with economists about kind of the future of the -- how -- the trajectory of the U.S. economy. When you talk to people on the ground, you get a better sense of where consumers actually are right now.

BOLT: Yeah, absolutely. And I'm very connected to the business world here in Portland, beautiful Portland, Oregon. And a lot of the consumers will come in. You know, we interact day to day with consumers. So, what I'm hearing is, is the affordability issue.

The price of almost everything has gone up, unfortunately. And specifically, really over the last five years, we've seen a lot of price increases. And last year was no exception. So, things are getting more expensive.

When we pay more in tariffs, it is a bit of a tax on small business. We have to pass on some of those costs just to stay viable as a business. And every business I'm involved with, which is a couple here that I've invested in, has to do the same thing. We also have some great partners overseas that have shouldered some of those costs, so we don't have to pass along everything.

But as we increase costs, it means we have fewer customers that can afford our product. And I love getting our lenses into the hands of customers to repair the eyewear they love. So fewer customers is disappointing, but it's an unfortunate reality of rising costs right now.

MATTINGLY: Yeah, it's an important message for policymakers here in Washington to hear.

It's also important for you to remember the Rose Bowl last year when Ohio State hung like 90 on Dan Lanning and Oregon.

I'm sorry, I'm grasping right now. It's been a rough couple of days. And watching you guys clearly move on to advance hasn't made it any easier. But most importantly, I do -- I genuinely appreciate your time and

sharing your story, the story of Revant Optics. Jason Bolt, thanks so much.

BOLT: Thank you so much for having me.

MATTINGLY: Well, multiple storms are taking aim at the West Coast of the U.S., with warnings about flooding and potential mudslides. We're going to go to the CNN weather center for an update on the forecast, next.

(COMMERCIAL BREAK)

[18:57:17]

MATTINGLY: In our world lead, at least one person died and 12 were injured in Mexico City after a magnitude 6.5 earthquake struck today. What you're seeing here is a result of the camera shaking when the earthquake struck. The shaking lasted for about 15 seconds. The quake, it broke windows, toppled trees and knocked down traffic lights in Mexico City.

The one death came when a man tripped and fell while evacuating his apartment building. Now, the quake struck during Mexican President Claudia Sheinbaum's daily news conference, forcing everyone, as you can see here, to evacuate.

Well, in our national lead, we are keeping an eye on California heading into the weekend, where a new series of storms is getting ready to roll in, threatening to bring flooding, rockslides and mudslides.

CNN's Derek Van Dam is in the CNN Weather Center.

And, Derek, walk us through the big concerns heading into the weekend.

(BEGIN VIDEOTAPE)

DEREK VAN DAM, AMS METEOROLOGIST: Amongst (VIDEO GAP) roads turning to rivers in southern California over the past couple of weeks, here's a (VIDEO GAP) noticed this video coming out of San Diego on New Year's Day of a young child being rescued from rapidly rising flood waters in and around their vehicle. Wow. That's just really heroic to see those first responders addressing that situation so calmly and so professionally.

Now we have a bit of a reprieve in the heavy rainfall. So, giving California at least a moment to catch its breath from these incessant atmospheric rivers that have bombarded the state over the past couple of weeks. But unfortunately, it will be a short-lived break. We have yet another atmospheric river taking aim at the state, starting to line up across the northern portions of California, and it will eventually shift further southward and impact southern California from Saturday night into early Sunday morning.

So, here's a look at the latest flood alerts that encompass much of the Sacramento Valley, in northern portions of the state. Remember (VIDEO GAP) north to south here, with the atmospheric river coming in, it's going to produce rainfall that could lead to flash flooding. We've got a very saturated environment across this region in and around Sacramento, and then across the transverse mountain ranges that line west to east across southern California as that atmospheric river starts to shift a little further south into southern California.

You'll see how those mountains help wring out the available moisture and produce heavy rainfall once again across that part of the state. Widespread one to three inches for the greater Los Angeles area. Higher totals across the central and northern coastline of California.

But what's interesting here is that you have to look really hard on this drought monitor map for any states in the Lower 48 that are not impacted by drought, California being one of them.

Back to you.

(END VIDEOTAPE)

MATTINGLY: Derek Van Dam, thanks so much.

Well, coming up Sunday on "STATE OF THE UNION", House Judiciary Chairman Jim Jordan and Kentucky Governor Andy Beshear. That's Sunday at 9:00 a.m. and noon Eastern on CNN.

You, of course, can follow the show on X and Instagram @TheLeadCNN. If you ever miss an episode of THE LEAD, you can watch the show on the CNN app.

"ERIN BURNETT OUTFRONT" starts now.