The Pentagon announced Phelan's departure on social media, with spokesperson Sean Parnell stating he was 'departing the administration, effective immediately.' No reason was given for the departure by the Pentagon. Navy Under Secretary Hung Cao will serve as acting secretary, the Pentagon confirmed.
According to a Pentagon spokesperson and a senior administration official, Phelan's departure was due to a falling out with Defense Secretary Pete Hegseth over issues including shipbuilding reforms. Senior Pentagon officials were frustrated when Phelan took a shipbuilding proposal directly to President Trump, bypassing Hegseth, sources said. The Wall Street Journal reported that Phelan had a close relationship with Trump, regularly chatting at Mar-a-Lago and texting about shipbuilding. Phelan, a businessperson and political donor without a military background, was sworn in as Navy Secretary in March 2025, according to multiple reports.
The departure is the latest in a series of high-profile removals at the Pentagon under the Trump administration. Hegseth previously fired Army Chief of Staff Gen. Randy George. The Trump administration has removed several high-profile Pentagon officials without providing a public explanation, according to research.
Phelan addressed the Navy's annual conference on Tuesday, the day before his departure, touting plans for a next-generation battleship in his keynote address, according to research. CNN reported that Phelan flew on Jeffrey Epstein's plane, according to flight logs in the Epstein files.
Acting Secretary Hung Cao is a U.S. Naval Academy graduate and was commissioned as a special operations officer, serving as a diver and explosive ordnance technician, according to research. He deployed to Iraq and Afghanistan during the post-9/11 wars and worked at the Pentagon, including as the section head for the budget programming division in the Office of the Chief of Naval Operations. After leaving the Navy, Cao ran unsuccessfully for U.S. House and Senate seats as a Republican candidate in Virginia during the 2022 and 2024 election cycles. Last year, Phelan tasked Cao as chief management officer with leading and synchronizing the modernization of the Navy's unclassified IT systems and critical defense business systems. Cao was nominated for the Navy undersecretary position last year by Trump. In a statement, Cao said, 'There's a generation of young people that are eager to serve. They grew up in the digital age where technology evolved at quantum speed. They deserve the best training and weapons available. Their intrinsic desire to solve problems using technology should not be stifled by red tape.'
Meanwhile, the US Navy is executing a blockade of Iranian ports near the Strait of Hormuz, according to multiple reports. Iranian forces seized and attacked three container ships attempting to pass through the Strait of Hormuz on Wednesday, multiple reports indicate. Global oil markets have been upended and prices rose after the Iranian actions, according to multiple reports.
The White House denies reports of a deadline for the US-Iran ceasefire, White House press secretary Karoline Leavitt said.
Several questions remain unanswered. What exactly caused the falling out between Phelan and Hegseth? Was Phelan fired or did he resign? What is the status of the shipbuilding proposal Phelan took directly to Trump? Are the reports of Iranian attacks on container ships in the Strait of Hormuz confirmed? What is the timeline for the US-Iran ceasefire negotiations? A public affairs official in the Office of the Secretary of the Navy referred DefenseScoop to Parnell's statement when asked about Phelan's departure.