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Axios turned 1 today  — and, more importantly, we're launching our newest coverage area: international affairs. 🌎 See the new stream here.

1 big thing: John Kelly and "Steve Bannon territory"

White House Chief of Staff John Kelly approached a danger zone in Trumpworld last night by telling Fox News' Bret Baier that Trump has done some evolving on immigration issues.

  • The instant blowback: A source told Axios' Jonathan Swan that Kelly "ventured into Steve Bannon territory" by creating the impression that he's manipulating Trump.
  • Why it matters: "Steve Bannon territory" is a potentially very uncomfortable place for the White House chief of staff.

Go deeper: Swan dives deep into the state of Kelly, informed by dozens of conversations with senior Trump officials.

2. Shutdown watch
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Data: Congressional Research Service; Chart: Lazaro Gamio / Axios

In order to pass the continuing resolution that will fund the government past its Friday deadline, GOP leadership must win over two key contingents: Senate Democrats, who say they have the votes to stop a short-term deal, and members of the House Freedom Caucus.

Right now, it's hard to see the path that would allow them to satisfy both. More.

3. What you missed

A tunnel Israel says was dug by the Islamic Jihad group leading from Gaza into Israel, which uncovered and destroyed the tunnel in late October. Photo: Jack Guez / AFP / Getty Images

  1. American officials have released satellite photographs they claim show six Chinese-owned or operated cargo ships engaging in trade with North Korea that is banned under U.N. sanctions. More.
  2. Germany and China eclipsed the U.S. in global approval of their leadership around the world in 2017, per the Gallup World Poll. Chart.
  3. A group of not-for-profit hospital systems that own 10% of U.S. hospitals are banding together to create a new generic drug company. Details.
  4. Amazon has narrowed the list of cities competing to host their second headquarters to 20 cities. Full list.
4. What I'm reading

Philip Gordon and Robert Blackwill, senior fellows at the Council on Foreign Relations and veterans of the Obama and Bush White Houses respectively, make the case in Foreign Affairs that Russia must face far stronger consequences for 2016 election meddling. Dive in.