Instead, Shanahan will immediately take the reins and Shanahan "could be there for a long time" in the acting defense secretary position, Trump said, according to Reuters, during his surprise visit to Iraq yesterday.
Shanahan is a former Boeing executive who joined the Pentagon in July 2017.
"I am particularly distressed that he is resigning due to sharp differences with the president", the Kentucky Republican said in a statement.
Markets Right Now: US stocks open lower as sellers return
Investors have been unnerved by the potential for weaker economic growth and a partial USA federal government shutdown . Technology companies, a big driver of the market's gains before the October downturn, slumped Thursday.
"We consider this a step in the right direction with the ability to begin the peace process, so let's just see how it will be realized in practice because earlier we heard that the Americans didn't fulfil their promises in that area", she said.
In the resignation letter, James Mattis said he planned on staying until the end of February to ensure a permeant replacement could be chosen and to attend a previously scheduled North Atlantic Treaty Organisation meeting.
It was not immediately clear why Mattis' departure date was apparently moved up, but tension in the Defense Department and Washington generally has skyrocketed in the days since he suddenly announced his resignation. "It is regrettable that the president must now choose a new Secretary of Defense".
NBC5 Forecast: Storms return after Christmas | Weather
After two days of "quiet weather ", Wednesday will bring more snow to the Cascades, which received a lot this past weekend. Winds will relax heading into Christmas Day , and temperatures will generally warm into the upper 30s to lower 40s.
"We in the USA military are privileged to defend America, especially at this time of year, for we ensure our fellow Americans celebrate this season of hope in peace and safety", the letter began.
Anxious that weak ties between major militaries could lead to misunderstandings that snowball into conflict amid tense relations, USA officials had said Mattis was attempting to forge a relationship with Chinese military leaders.
Outgoing Secretary of Defense James Mattis, who announced his resignation last week in response to President Donald Trump's plans to bring home troops from Syria and Afghanistan, wished troops a Merry Christmas.
Planned drawdown in Afghanistan imperils United States push for peace
Trump's aim is to eventually withdraw all 14,000 troops in Afghanistan over the next several months, the Journal reported.
The situation has put the American generals in the awkward position of attempting to downplay the significance of a potential reduction in USA troops in Afghanistan while American diplomats try to negotiate a peace deal with the Taliban. More than 2,400 American soldiers have died in Afghanistan since the 2001 USA -led invasion, and Trump announced in a video last week that troop deaths were on his mind in announcing the pullouts.