By Alan Murray
December 12, 2016

Good morning.

President Obama earned the dubious distinction of having fewer experienced business people in his cabinet than any other administration in modern times. President-elect Trump seems to be going for the opposite honor. In addition to Commerce Secretary-designate Wilbur Ross and Treasury Secretary-designate Steve Mnuchin, he is said to be leaning toward ExxonMobil CEO Rex Tillerson to be Secretary of State and Goldman Sachs veteran Gary Cohn to head the National Economic Council. (Goldman Sachs, incidentally, is one of the biggest beneficiaries of the “Trump Bump” in the stock market, accounting for 29% of the Dow’s recent rise.)

Tillerson is a particularly interesting choice. He is an engineer and a respected businessman – smart, focused, some would say arrogant. Steve Coll, who authored a book entitled Private Empire: ExxonMobil and American Power, wrote over the weekend that Tillerson’s life has been largely shaped by two institutions: ExxonMobil and the Boy Scouts. Like the man he may serve, he has little tolerance for political correctness. And while he has never served in government, he runs a company that is, as Coll’s book argues, a sort of independent state that must maintain diplomatic relations with some of the most difficult countries and regions in the world.

Tillerson’s biggest foray into national politics was his advocacy of the Common Core standards for education, which he pushed relentlessly as the Business Roundtable’s education chair. As Fortune’s Peter Elkind chronicled last year, Tillerson was so convinced of the essential rightness of his position that he missed a rising grass-roots backlash, and appeared tone-deaf to the political challenge.

Tillerson also shares Trump’s disdain for the press. When I interviewed him before the Council on Foreign Relations in 2012, he attacked journalists as “lazy.” “They just don’t do their homework,” he added. When I suggested he might be painting the media with too broad a brush, he replied: “There are probably a couple of camel hairs in the brush that don’t apply.”

But the issue that has come to the fore is Tillerson’s business relationship with Russia. Sen. John McCain told Fox News the Exxon chief’s relationship with Vladimir Putin is a “matter of concern to me.” Those concerns are also being fed by weekend reports about Russia’s efforts to influence the U.S. elections.

Meanwhile, Trump’s war of words with China also heated up over the weekend. The President-elect said in an interview, “I don’t know why we have to be bound by a one-China policy” that recognizes Taiwan as part of China. A spokesman for the Chinese foreign ministry responded today that “upholding the one-China principle is the political basis” for China-U.S. ties.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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