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Tillerson during a visit to London in January. Photo: Kate Green / Anadolu Agency / Getty Images

This has been months in the making. Mike Allen and I were the first to report that President Trump was considering Mike Pompeo for the job, and that was back in October.

The bottom line: The relationship between Trump and Rex Tillerson was untenable. They clashed on just about every major policy issue — from the Iran deal to North Korea and Qatar. Tillerson even privately argued against Trump’s signature foreign policy decisions to withdraw from the Paris climate accords and to recognize Jerusalem as Israel’s capital and to move the US embassy there. 

The back story: Trump fell out with Tillerson almost immediately. Tillerson clashed with the White House over personnel. He kept trying to appoint people who opposed Trump and his agenda and he repeatedly clashed with the White House head of personnel, Johnny DeStefano. Their clashes culminated in a heated meeting in which Tillerson rudely reamed out DeStefano.

The animus wasn’t confined to Tillerson. His chief of staff, Margaret Peterlin, managed to make more enemies across the administration than perhaps any senior official. And Tillerson’s spokesman Steve Goldstein did little to hide his disdain for Trump, in the view of White House officials.

The big picture: As one Republican senator pointed out to me, secretary of state is the role above all others in the cabinet, where there can’t be a hair’s breadth separating the secretary and the president. It’s more tenable, for example, to have a total breakdown in relations between the president and his attorney general.

Trump has no confidence in Jeff Sessions — and repeatedly makes that clear publicly — but, as this senator pointed out, it can be helpful to have some independence and separation between the president and his Justice Department. 

But when the secretary of state speaks, he is the voice of America and the president. Foreign leaders couldn’t trust that Tillerson was representing Trump’s point of view, because the president repeatedly contradicted and undercut him.

There’ll be no separation between Trump and Pompeo. The outgoing CIA director has a close daily relationship with the president, and no member of Trump’s cabinet more enjoys the president’s trust.

Go deeper

Dan Primack, author of Pro Rata
1 hour ago - Economy & Business

Trump blocks banks from limiting loans to gun and oil companies

Illustration: Sarah Grillo/Axios

Big banks are no longer allowed to reject business loan applicants because of the industry in which they operate, according to a new rule finalized on Thursday by the Trump administration.

Why it matters: Wall Street has curtailed its exposure to industries like guns, oil and private prisons, driven by both public and shareholder pressures. This new rule could reverse that trend.

Former FDA commissioner: "Reliable drug supply is absolutely critical"

Axios' Caitlin Owens and former FDA commissioner Mark McClellan. Photo courtesy of Axios Events

Having a reliable supply of pharmaceutical drugs throughout America will be "absolutely critical" to boosting affordability in health care during the Biden administration, former Food and Drug Administration (FDA) commissioner Mark McClellan said at a virtual Axios Event on Friday.

The big picture: McClellan, who served under President George W. Bush, says drugs having limited supply and limited competition leads to elevated pricing. He considers drug supply to be a national security and public health issue.

Felix Salmon, author of Capital
4 hours ago - Economy & Business

Americans are still spending money

Source: Census Bureau; Chart: Axios Visuals

Americans spent more money at stores and restaurants in 2020 than they did in 2019 — even in the face of a devastating global pandemic that shut down broad sectors of the economy.

Why it matters: The monthly retail sales report this morning came in well below expectations, and showed consumer spending falling on a seasonally-adjusted basis. Total expenditures were still higher in December 2020 than they were a year previously, however.