Defense Secretary Pete Hegseth abruptly ousted Navy Secretary John Phelan on April 22, installing Under Secretary Hung Cao as acting Navy Secretary amid mounting frustration over shipbuilding delays and internal Pentagon clashes. The firing came as the United States maintains a high-stakes naval blockade of Iranian ports near the Strait of Hormuz, placing the Navy under its most serious operational pressure in a generation.
Cao, a retired Navy captain who served 25 years as an explosive ordnance disposal officer and special operations leader, will immediately take charge of the service. The Vietnamese-born refugee deployed to Iraq, Afghanistan, and Somalia before pursuing unsuccessful congressional and Senate campaigns in Virginia. Trump nominated him as under secretary in February 2025, and he won Senate confirmation in October.
Chief Pentagon spokesman Sean Parnell announced the dismissal in a post on X on April 22 evening, capping months of deteriorating relations between Phelan and Pentagon leadership. The move represents one of the most consequential Pentagon shakeups of President Trump’s second term and makes Phelan the first service secretary to depart, following a string of senior military dismissals under Hegseth that includes the prior chairman of the Joint Chiefs of Staff, Gen. Charles Q. Brown Jr., the Army Chief of Staff, Gen. Randy George, and a prior Chief of Naval Operations, Adm. Lisa Franchetti.
Multiple officials familiar with the matter said Phelan’s relationship with Hegseth had deteriorated sharply since late 2025, when disagreements over fleet readiness, shipbuilding reform, and the pace of industrial-base modernization spilled into open confrontation. The defense secretary viewed Phelan’s direct communication with Trump as an attempt to bypass the chain of command, a move that irked Hegseth. Phelan, a financier who co-founded MSD Capital and chaired Rugger Management, had no prior military service and was seen by Hegseth’s inner circle as resistant to the warfighter-first culture the Pentagon chief has tried to impose.
The final break came during a White House meeting April 22 between Trump and Hegseth on shipbuilding. Trump, frustrated by slow progress, became convinced that Phelan needed to go, and he and his defense secretary resolved to install someone who would move faster. Hegseth then informed Phelan he needed to resign or be fired.
Speaking in the Oval Office the following day, Trump said that Phelan “had some conflicts with some other people, mostly as to building and buying new ships,” adding, “I’m very aggressive in the new shipbuilding.” The president later praised Phelan on Truth Social as “a long time friend” and suggested he would welcome him back to the administration in the future. Trump, who had personally championed Phelan’s nomination in late 2024, told aides he agreed with Hegseth that new leadership at the Navy was needed.
The White House has grown increasingly impatient with delays across submarine and surface combatant programs, including Virginia-class attack submarines, the new FF(X) frigate, and the Columbia-class ballistic missile submarine program. Cost overruns and workforce shortages at major yards have pushed several programs behind schedule, creating frustration with the pace of shipbuilding reform that became central to Phelan’s ouster.
Just one day before his firing, Phelan delivered a keynote address at the Sea-Air-Space 2026 exposition and told reporters, “We’re going to really need to improve our ability to build ships.” He also oversaw the release of the Navy’s fiscal 2027 budget request — a $377.5 billion proposal that includes $65.8 billion for shipbuilding and initial funding for the Trump-class battleship. But insiders say his reform efforts were too slow for a White House that wanted sweeping changes yesterday.
Phelan had also promoted the Trump-class battleship concept, which Hegseth saw as a distraction from his strategy of smaller, uncrewed ships, further deepening the rift between the two men. The friction extended to Deputy Secretary of Defense Steve Feinberg, the co-founder of Cerberus Capital Management, who pushed to take control of major responsibilities for shipbuilding and Navy acquisitions — a job that would typically fall within the Navy secretary’s purview.
A reported ethics investigation created a persistent cloud over Phelan’s standing in congressional oversight hearings, with one source citing the probe as a factor in the decision to push him out. Additionally, Fox News reported that friction stemmed from Phelan’s refusal to ignore a federal judge’s ruling that punishing Sen. Mark Kelly for reminding military officers of their duty not to follow illegal orders would violate his First Amendment rights.
Phelan’s defenders argue he was scapegoated for structural problems — shipyard workforce shortages, supplier consolidation, and decades of underinvestment in maritime infrastructure that cannot be unwound in 13 months. But inside the West Wing, patience had run out.
The urgency has only intensified amid the U.S. naval blockade of Iranian ports, which took effect April 13 after the collapse of negotiations in Islamabad. The U.S. Fifth Fleet has surged assets to the region, and Central Command reports it has directed 31 vessels to turn around or return to port. A ceasefire is currently in effect, though the Trump administration has said all armed forces stand ready to resume combat operations against Iran should it expire. The Strait of Hormuz, which normally carries roughly 20 percent of the world’s seaborne oil trade, has seen traffic plummet by more than 90 percent since the Iran war began in late February.
Capitol Hill reaction was swift and divided. Senate Armed Services Committee Republicans largely backed the president’s move, citing the need for decisive leadership during the Hormuz standoff. Democrats warned that the revolving door of Pentagon leadership during an active conflict creates dangerous instability.
The White House has not yet named a permanent successor. Whoever inherits the secretary’s office permanently will face an immediate trial by fire: sustaining pressure on Iran, accelerating the Golden Fleet shipbuilding initiative, restoring readiness, and navigating a Pentagon where the defense secretary does not tolerate dissent.
According to senior administration officials, the dismissal caps months of internal friction that had become untenable as the Navy confronts its most serious operational challenge in a generation. For now, the Navy enters a period of extraordinary turbulence at precisely the moment the nation is asking it to do more than it has in decades.