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Iran Rejects Trump's Demand for Direct Nuclear Talks; Coffee Prices Reach Highest in Decades. Aired 6-6:30a ET

Aired March 31, 2025 - 06:00   ET

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

RAHEL SOLOMON, CNN ANCHOR: Running, but as you sort of allude to there, she is leading in the polls. And so, that's why it would be so significant, if in fact, she is unable to run again.

[06:00:08]

Melissa Bell in Paris, thank you.

All right. And that will do it for us here on EARLY START. I will see you tomorrow.

In the meantime, let's get a quick market check, because why not on a Monday morning, on the week where we may see additional tariffs on Wednesday, and of course, the jobs Friday -- on Friday?

I'll see you tomorrow. CNN THIS MORNING starts right now.

AUDIE CORNISH, CNN ANCHOR: It is Monday, March 31. And here's what's happening right now on CNN THIS MORNING.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: I can't imagine them doing anything else but making a deal.

(END VIDEO CLIP)

CORNISH: President Trump's threat: make a deal or, quote, "There will be bombing." And overnight, Iran is responding.

Plus, this.

(BEGIN VIDEO CLIP)

PETER NAVARRO, COUNSELOR TO U.S. PRESIDENT: Consumers and Americans are going to be better off.

(END VIDEO CLIP)

CORNISH: Bracing for impact. Wall Street and markets around the world prepare for the latest round of tariffs, just days away.

(BEGIN VIDEO CLIP)

TRUMP: I don't want to talk about a third term now, because no matter how you look at it, we've got a long time to go.

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CORNISH: President Trump, is he considering a third term? Well, he's not dismissing it. But would independent-thinking Americans go for it?

And devastation that hasn't been seen in more than a century. Some survivors are pulled from the rubble of last week's earthquake in Myanmar, but that search grows more grim.

It's 6 a.m. here on the East Coast. Here's a live look at a foggy New York City. We're just hours from the opening bell, and stocks are slipping.

Good morning, everybody. I'm Audie Cornish. I want to thank you for waking up with me.

We're going to begin with that ultimatum from President Trump to Iran. It's agree to a nuclear deal with the U.S. or, quote, "There will be bombing."

Overnight, Iran responding, saying any action will be reciprocated.

Now, the president sent a letter to Iran, proposing direct talks with the country, and that request was rejected.

(BEGIN VIDEO CLIP)

TRUMP: I can't imagine them doing anything else but making a deal. I would prefer a deal to the other alternative, which I think everybody in this plane knows what that is. And that's not going to be pretty. And I do not prefer that.

(END VIDEO CLIP)

CORNISH: So, here's how their supreme leader characterized President Trump's offers to negotiate a new nuclear treaty earlier this month.

(BEGIN VIDEO CLIP)

AYATOLLAH AL KHAMENEI, IRANIAN SUPREME LEADER (through translator): Some bullying governments insist on negotiation, but their negotiation is not aimed at resolving issues. It's for domination.

(END VIDEO CLIP)

CORNISH: All right. To talk about this, we're bringing in Joel Rubin, former deputy assistant secretary of state in the Obama administration.

Joel, thanks so much for being here with you.

JOEL RUBIN, FORMER DEPUTY ASSISTANT SECRETARY OF STATE: Great to be with you, Audie.

CORNISH: So yesterday, Iran's president basically said that they were rejecting this because of, quote, "breach of promises," alluding to the fact that Trump withdrew from the 2018 [SIC] -- in 2018, Trump withdrew --

RUBIN: Yes.

CORNISH: -- from the nuclear deal. So, are we looking at the fallout from that diplomatic approach?

RUBIN: Well, we certainly have not benefited from that diplomatic decision by Donald Trump seven years ago to get out of the nuclear deal.

There's one fundamental point about nuclear negotiations with Iran, which is that the only way to verifiably constrain their nuclear program is through a diplomatic agreement that they sign up to.

And they did that in 2015. They were restrained. It was verifiable. The international community said so.

CORNISH: And we should say, many conservatives, the Trump administration --

RUBIN: Yes.

CORNISH: -- of course, they have long criticized that deal.

RUBIN: Yes.

CORNISH: They did not see it as airtight, as it was billed by the Obama administration. And so, they're approaching this differently.

RUBIN: Yes. And, you know, they -- they were critical of the nuclear components to a certain extent. But what they were more upset about was the broader issues related to Iran's engagement in the region, support for militias and terrorist groups, ballistic missile program, all legitimate concerns.

And so now, the question for President Trump is, is he going just for a nuclear arrangement, or does he want to deal with the other issues, as well? And it's not clear.

CORNISH: Which is their activities in the region.

RUBIN: Support Hamas, Hezbollah.

CORNISH: Well, how far will he go to stop that?

RUBIN: Exactly.

CORNISH: They've talked about -- Iran has talked about indirect talks through a country like Oman.

RUBIN: Yes.

CORNISH: Is that even possible at this point? Can secret talks work, so to speak? RUBIN: It can. But, you know, with President Trump, it doesn't seem

like much is very secret at this stage. I mean, when he's going on an airplane and threatening to bomb another country, he really puts the whole dynamic into a box.

Having back-channels now, do not -- There were some back-channels, actually, early on in December. Elon Musk did meet with Iran's ambassador to the U.N. So, there were some discussions.

CORNISH: And then, again, it was Elon Musk who met.

CORNISH: Elon Musk met with Iran's ambassador at the United Nations in December.

[06:05:03]

And in fact, now President Trump, he did send a letter to the supreme leader, which is a smart move, a backchannel of sorts. But now that's all blown up, and now it's out in the open.

CORNISH: I want to talk about Russia for a second.

RUBIN: Yes.

CORNISH: And the reason why is because, yet again, here's where Trump is issuing a kind of deadline. He's basically saying, because Vladimir Putin is not exactly embracing this approach to a deal with Ukraine, he says that he's going to threaten Russia with more tariffs. Listen to how he explains it.

(BEGIN VIDEO CLIP)

TRUMP: It's a psychological deadline. If I think they're tapping us along, I will not be happy about it.

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CORNISH: A psychological deadline. I want to talk about this approach. What do you hear in this?

(END VIDEO CLIP)

RUBIN: Diplomacy by diktat. I don't hear diplomacy. I don't hear a plan or a strategy. I don't hear that there's a real mechanism for follow-through.

I agree that more pressure needs to be put on Vladimir Putin. I think that President Trump has failed to do that for the first couple of months.

CORNISH: But people are arguing that Trump has also brought many more conversations --

RUBIN: Yes.

CORNISH: -- to -- to a negotiating point than was happening under the prior administration.

RUBIN: Well, he certainly has spoken to the Russians, and he's had Steve Witkoff engage and go to Moscow. Have they obtained concessions? No.

And right now, it looks like the United States, rather than building a coalition of diplomatic allies in support of this process, he's kind of doing it on his own and making pronouncements. And that's not structural.

It's like what we saw with Kim Jong-un back in 2019, when President Trump said, I'm going to make a deal with North Korea. There was no follow-through. There was no process. And ultimately, even after meeting with him, there was no deal.

CORNISH: All right. Joel Rubin, thanks so much --

RUBIN: Thanks, Audie.

CORNISH: -- for your insight. I hope we have you back.

In the meantime, we're going to have the group chat coming up on CNN THIS MORNING. Before that, I want to tell you about a rocket that exploded just seconds after liftoff. Why the company behind the launch is still trying to call it a success.

Plus, breaking overnight, French far-right leader Marine Le Pen found guilty of embezzling government funds. The sentence that could end her political career.

And bad news for coffee drinkers. It's not just the drive-through anymore that's pricey. Why every kind of cup of joe is about to get more expensive.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Oh, you want this type of milk? Fifty cents more. Oh, you want the syrup? Oh, this one comes included, but not the seasonal syrup. It's $1.50. Why am I paying $9 for a cup of coffee?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[06:12:04]

CORNISH: As you're getting ready, it's ten minutes past the hour. We want to give you your morning roundup. Some of the stories you need to know as the day goes on.

As the search for survivors continue in Myanmar, the death toll rises. That's following last week's 7.7 magnitude earthquake. At least 1,700 people are confirmed dead, and that number is expected to continue to go up. More than 3,400 others are reported injured.

In the meantime, the destruction has left thousands homeless. And a rocket crashes seconds after takeoff from a spaceport in Norway.

So, the trip lasted about 30 seconds before spinning out of control, crashing in the water, and exploding.

Still, the German company behind the rocket calling it a success, saying that even this short flight was just enough time to gather data.

And a fast-moving fire led to evacuations in California. This started Sunday afternoon near Fresno; quickly spread more than a thousand acres because of winds. Today, the area is expected to have wind gusts reach up to 65 miles per hour.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: A storybook season continues for Auburn.

(END VIDEO CLIP)

CORNISH: And Auburn secures the last spot in the men's Final Four. Last night during the NCAA college basketball tournament, they beat Michigan State 70 to 64.

So, it's going to be Duke, Florida, Houston, and Auburn, making the first time since 2008 that all four No. 1 seeds advanced to the Final Four.

And you've got to see this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Big-time brawl now in the front row. It's going to take a lot to break this up.

(END VIDEO CLIP)

CORNISH: And an old-school brawl breaks out between the Minnesota Timberwolves and the Detroit Piston. Every pro player on the court -- coaches, trainers -- everyone gets involved.

Seven people get kicked out of the game, and that includes the Pistons' head coach.

Still coming up on CNN THIS MORNING, major cuts underway at the Department of Health and Human Services. Donna Shalala, former HHS secretary, is joining me live to discuss how it could impact your health.

Plus, have you noticed that your coffee's costing a little, you know, extra? We'll dive into those rising coffee prices.

And just how serious is President Trump about a third term? We're going to take that one to the group chat.

And good morning to my friends in Nashville. Some severe storms move East. They're rolling through middle Tennessee. Stay safe. (COMMERCIAL BREAK)

[06:18:47]

(BEGIN VIDEO CLIP)

SCOTT PATTERSON, ACTOR: Every morning for you is a coffee morning.

LAUREN GRAHAM, ACTRESS: This is a jumbo coffee morning. I need coffee in an I.V.

(END VIDEO CLIP)

CORNISH: I got a new mug today. And if you are drinking a coffee this size, this "Off Script" is for you. Because we are talking about how tariffs are going to affect coffee prices.

So, even though prices of other goods have started to go down, the cost of coffee is actually at its highest in decades. Last month, the average cost of a pound of roast ground coffee reached $7.25. So, what's causing this?

Joining me now to discuss, coffee roaster Kat Melheim. She's also the marketing and social media manager at the online coffee trading platform El Grano.

CNN previously reported that -- first, I should just say hello.

KAT MELHEIM, MARKETING AND SOCIAL MEDIA MANAGER, EL GRANO: Hi.

CORNISH: I'm sorry about that, Kat. Hi. How are you? Thank you for coming in.

MELHEIM: Thank you so much.

CORNISH: All right. So, we have talked about the fact that coffee prices are super volatile, right? Because they're affected by labor issues. They're also affected by even the threat of tariffs. Is that true?

MELHEIM: Yes, absolutely. Because yes, volatility right now is at an all-time high in the coffee sector. We're seeing all-time high prices of -- you mentioned roasted coffee. But roasters are seeing all-time highs of green, raw, unroasted coffee.

[06:20:04]

CORNISH: So, you've got to buy the beans first.

MELHEIM: You've got to buy the beans first. You can't have roasted coffee --

CORNISH: Yes.

MELHEIM: -- without unroasted coffee. And then on top of that, there are these threats of tariffs. There's,

you know, climate change, which is completely unpredictable. And shipping delays, yada, yada.

So, there's tons of tons of volatility in the -- in the coffee industry right now.

CORNISH: Because these prices are so high, I'm also seeing reports about organized coffee, like, thefts.

MELHEIM: Yes.

CORNISH: Does this mean like stealing a full truck, or what are we talking about here?

MELHEIM: Yes, it can be. It can be stealing a full -- I'm hearing the same thing.

I was in Honduras last week. And there are like, yes, escorts for full trucks, full container loads of coffee. Because that can be tens of thousands, if not hundreds of thousands of dollars right there.

CORNISH: I want to talk to you about the strategies that roasters or local coffee shops might be using to try and deal with all this. Are they raising prices?

MELHEIM: Yes. So, I'm -- the event I was at last week both had producers, coffee producers and coffee roasters. And I was hearing from a lot of roasters that they're really afraid to raise their prices, because they're afraid that consumers won't kind of go along with it, that they'll just leave.

CORNISH: Yes. Because we expect coffee to be cheap.

MELHEIM: Right.

CORNISH: Like, a cup of coffee is supposed to be -- I don't know -- a dollar or $2.

MELHEIM: Right, right. I mean, you need it to wake up in the morning, right?

CORNISH: Yes.

MELHEIM: But yes, so I'm hearing from roasters that they're afraid to raise their prices. but the -- the problem with that is that, as I said, the green coffee, unroasted coffee prices are at an all-time high.

So, roasters really, in order to kind of stay in business or in order to -- in order to support the coffee farmers, they're going to need to raise their prices.

CORNISH: One other thing. The National Coffee Association, I understand, has been, like everyone, trying to lobby for an exemption. I feel like every lobby group is out there. MELHEIM: Yes.

CORNISH: Retailers, automakers, and it's basically going to the White House and being like, this is all fine, but maybe not us.

MELHEIM: Yes.

CORNISH: How is that working out?

MELHEIM: I mean, I -- I'm not involved in the leadership of the -- of those organizations.

CORNISH: But is there a push, like, for the --

MELHEIM: Sure, absolutely. Yes. Because, you know, coffee, everybody needs their coffee to wake up in the morning. And if we, if we aren't exempt, then the prices must go up.

CORNISH: All right. You're saying the prices must go up. Should they go up? I mean, how do you think about what the price of a cup of coffee should be?

MELHEIM: No, that's a great question. So, coffee has really been undervalued. Farmers have been underpaid for decades, if not centuries.

A lot of times, farmers have a hard time covering even their cost of production, which includes inputs like fertilizers, but also labor. They have a really hard time covering the cost of labor.

CORNISH: Yes. You're talking about Honduras, Colombia.

MELHEIM: Yes.

CORNISH: These are countries where, also, there's been a mass kind of exodus of labor --

MELHEIM: Yes.

CORNISH: -- heading to the U.S. Southern border.

MELHEIM: Yes, well, coffee picking -- most coffee is picked still manually by hand. And it's a really, really arduous job. They're on, like, steep hillsides. The sun is really hot. They're very, very long days. They're carrying sacks of coffee on their back all day. So --

CORNISH: Who can blame them?

MELHEIM: Nobody wants to do that.

(CROSSTALK)

CORNISH: -- has always been, like, more expensive.

MELHEIM: Yes. CORNISH: I mean, I don't know. It feels like, should it be more expensive, should people adjust to this price or is this something to fight about?

MELHEIM: Yes. I mean, in my opinion, people need to -- consumers -- I know this is probably a hot take. But consumers need to kind of get used to paying more for coffee, especially if they're going to local roasters, independent roasters who are -- have direct relationships, direct sourcing from the coffee farmers.

Because that's how you know that the farmers are actually making the money, that -- the extra money that we're paying.

But yes, I mean, it has -- it's been years and years and years where people in producing countries have kind of taken a loss. And so, that's kind of why we're seeing this bounce back.

CORNISH: So, is it a luxury from now on?

MELHEIM: I mean --

CORNISH: Not a psychological one, an actual one.

MELHEIM: I mean, people are happy to pay $10 for a glass of wine when they're out, $15 for a cocktail. I think, in my opinion, we need to get used to paying a little bit more for coffee.

Now that -- you know, lattes also have additions of milk and syrups and things like that. So, those prices are set aside, like, apart from the price of coffee. But yes, I think we need to get used to paying more for coffee.

CORNISH: All right. Kat Melheim, thank you so much for talking with us.

MELHEIM: Thank you so much for having me.

CORNISH: I appreciate you for coming in.

Kat is a -- sorry, one second.

Straight ahead on CNN THIS MORNING, we've just learned French far- right leader Marine Le Pen will be banned from running for political office after being convicted of embezzling. Now, when that ban could go into effect, we're going to learn more.

And we're just hours from the opening bell. The Dow futures are already down this morning. They're still slipping. The manic Monday ahead on Wall Street.

(COMMERCIAL BREAK)

[06:29:56]

(BEGIN VIDEO CLIP)

NAVARRO: Tariffs are tax cuts. Tariffs are jobs. Tariffs are national security. Tariffs are great for America.

(END VIDEO CLIP)

CORNISH: We're just days away from what President Trump calls Liberation Day. This week, he plans to impose a 25 percent.