President Trump signed an executive order last Monday ordering the creation of a sovereign wealth fund within the next year, saying it could potentially buy TikTok.
If created, the sovereign wealth fund would place the US alongside numerous other countries that have launched similar funds as a way to make direct investments into private enterprises with government dollars.
Other countries with funds include Norway, China, UAE, Saudi Arabia, Singapore, Kuwait, Qatar, Hong Kong, South Korea, Australia, Kazakhstan, Oman, New Zealand, Ethiopia, Libya, and Russia, to name a few. There are over 90 sovereign wealth funds across the world managing over $8 trillion in assets, according to the International Forum of Sovereign Wealth Funds. Numerous US states, including Alaska, Texas, and New Mexico also have their own wealth funds, which help fund education and tax relief.
The text of the executive order didn't share many details and simply directed the Treasury and Commerce Departments to submit a plan for a sovereign wealth fund within 90 days, including recommendations on “funding mechanisms, investment strategies, fund structure, and a governance model.”
Typically sovereign wealth funds rely on a country's budget surplus to make investments, but the US operates at a deficit, so it remains to be seen where it would drive the capital from. Its creation would also require approval from Congress.
Trump told reporters, “We're going to create a lot of wealth for the fund. And I think it's about time that this country had a sovereign wealth fund.”
He also hinted at using the fund to buy TikTok. “We're going to be doing something, perhaps with TikTok, and perhaps not. If we make the right deal, we'll do it. Otherwise, we won't…we might put that in the sovereign wealth fund.”
Trump previously floated the idea as a presidential candidate, saying that a sovereign wealth fund could fund “great national endeavors” including infrastructure projects such as highways, airports, manufacturing, and medical research.
In other TikTok / Trump news… Trump tasked Vice President JD Vance and National Security Adviser Michael Waltz with overseeing the potential sale of TikTok before the most recent ban extension elapses in April, according to multiple sources on Capitol Hill and the White House.