Navy Secretary John Phelan has been ousted from the Trump administration in the middle of a tense naval standoff with Iran in one of the world’s most critical oil waterways.
The shock departure was announced by Pentagon spokesman Sean Parnell on X, who said the Navy chief was “departing the administration, effective immediately.”
There had been tensions brewing between Phelan and his bosses, Pete Hegseth and Steve Feinberg, over personnel issues and management style, among other things, according to the New York Times.
They had grown unhappy with the Navy secretary’s handling of President Donald Trump’s new “golden fleet” shipbuilding initiative, as part of which the Navy is building “Trump class” battleships, the New York Post reports.
“The administration really wanted to accelerate the shipbuilding program because of the president’s agenda … and the secretary seemed incapable of accomplishing those goals and he wasn’t well liked,” a GOP source familiar with Phelan’s standing at the Pentagon told the Post. “When you combine incompetence with arrogance it usually doesn’t end well.”
Meanwhile, Hegseth took issue with Phelan’s direct communication with Trump, viewing it as an attempt to leapfrog him, CNN reports, citing multiple sources.
Phelan, a wealthy financier and Republican donor with close ties to the president, was spotted in the West Wing on Wednesday, two people familiar with the matter told CNN.
A senior administration official told News Nation’s Kellie Meyer that Hegseth consulted with Trump and that both men “agreed new leadership at the Navy is needed.” The official also said that Hegseth informed Phelan of his dismissal “prior to it being made public.”
However, MAGA mouthpiece Laura Loomer claimed on X that, according to her sources, Phelan “wasn’t notified in a formal capacity” and found out that he was fired from Parnell’s statement.
The Daily Beast reached out to the Pentagon for further comment, but was referred to Parnell’s social media statement.
“On behalf of the Secretary of War and Deputy Secretary of War, we are grateful to Secretary Phelan for his service to the Department and the United States Navy,” Parnell wrote.
“We wish him well in his future endeavors.”
Phelan’s departure was marked by internal power struggles and sweeping changes within the Pentagon, often aligned with the broader agenda of Defense Secretary Pete Hegseth.
Army chief of staff Randy George was also ousted from the Pentagon this month, and Phelan’s own chief of staff, Jon Harrison, was purged last October.
Phelan had only taken the role in March 2025 after a career in private equity.
He raised millions for Trump’s campaign, including hosting a high-dollar fundraiser at his Aspen home ahead of the last election.
But his appointment as Navy Secretary raised eyebrows at the time because he had no prior military experience, with the White House framing him as an outsider brought in to shake up Pentagon bureaucracy.
Phelan’s departure also comes amid renewed scrutiny over his past associations. Documents released earlier this year placed Phelan among individuals listed in flight manifests connected to convicted sex offender Jeffrey Epstein, showing he flew on Epstein’s private plane in 2006 alongside other associates.
Stepping in as acting secretary is Hung Cao, a former Navy officer and Republican Senate candidate in Virginia known for his strong alignment with Trump-era politics.
During his Senate campaign, Trump once described the Vietnamese refugee as “the embodiment of the American Dream” and would poke lighthearted fun at his name.
“I love that name, Hung Cao. That name alone should get you elected,” Trump once joked at a rally.
Cao is also more aligned with Hegseth, according to the Times. The outlet reported that Phelan had a contentious relationship with Cao.
Phelan’s sudden exit leaves a leadership vacuum at a moment of heightened geopolitical risk for the Navy, where a blockade is currently taking place in the Strait of Hormuz amid ongoing tensions between the U.S. and Iran.
It also comes one day after the president was forced to announce an indefinite ceasefire with Iran after peace talks were derailed.
The move was a major reversal for Trump, who had repeatedly insisted that he had no desire to extend the ceasefire and was on the brink of making a “great deal” with Iran.
Speaking as the conflict entered another day—with no clear end in sight— Press Secretary Karoline Leavitt insisted that the U.S. “maintains control over the situation” and “leverage over the Iranian regime.”
“Not only have they been significantly weakened and obliterated militarily, but they are losing economically and financially every single moment that passes with this blockade,” Leavitt told reporters on Wednesday.
