US President Donald Trump has signed an executive order to establish a sovereign wealth fund, which could potentially include the acquisition of the popular short video app, TikTok. The fund aims to place the US alongside other countries with similar investment vehicles, such as those in the Middle East and Asia. However, the plan lacks specific details, and the Treasury and Commerce Departments are tasked with submitting a plan for the fund within the next 90 days.
The sovereign wealth fund could be financed through a variety of mechanisms, including tariffs and assets within the country. While it remains unclear how the fund will operate, Trump has expressed hopes that it will generate substantial wealth, potentially supporting national projects like infrastructure, manufacturing, and medical research. The fund could also serve as a platform for investment, including in high-profile assets such as TikTok, which has been under scrutiny due to national security concerns.
Treasury Secretary Scott Bessent stated that the fund would be set up within 12 months, while experts have raised concerns about the need for Congressional approval, especially given the current US budget deficit. The fund could potentially repurpose the US International Development Finance Corporation (DFC) or function independently, with the goal of benefiting the American people through investments in domestic projects and industries.
The idea of a sovereign wealth fund has garnered mixed reactions, with some analysts questioning the practicality of such a fund in the absence of a budget surplus. Despite these challenges, Trump’s proposal has sparked significant discussion about the future of US investments and the possibility of a government-backed TikTok acquisition.
