Trump directs American sovereign wealth fund, proposes to buy TikTok
Agencies
04/02/2025
President Trump signed an executive order to set up a sovereign wealth fund within a year, insisting that the fund could potentially buy the short video app TikTok.
WASHINGTON: The President of the United States (US), Donald Trump, on Monday signed an executive order to set up a sovereign wealth fund within a year, insisting that the fund could potentially buy the short video app TikTok.
Trump, however, did not provide further details other than not explaining how the fund would work.
Typically, sovereign wealth funds rely on the country's budget surplus to make investments, while the US operates in deficit. In addition, its establishment is also likely to require the approval of Congress.
"We are going to create a lot of wealth for this fund," Trump told reporters.
"And I think it's time for this country to have a sovereign wealth fund."
Trump had previously proposed the establishment of such a government investment mechanism when he was a presidential candidate, stating that it could fund "great national efforts" such as infrastructure projects including highways and airports, manufacturing and medical research.
Administration officials did not clarify how the fund would operate or be funded, but Trump has previously said it could be funded through "tariffs and other smart methods."
Treasury Secretary Scott Bessent told reporters that the fund would be set up within 12 months.
"We will generate asset income on the balance sheet of the United States for the people," Bessent said.
"There will be a combination of liquid assets and other assets that we will leverage for the people."
According to reports by The New York Times and Financial Times, the previous Joe Biden administration also considered setting up a sovereign wealth fund before Trump won the election in November.
Investors on Wall Street were shocked by this announcement.
"The establishment of a sovereign wealth fund usually indicates that a country has a surplus of usable savings, but in the case of the US, it is not in line with economic realities," said Colin Graham, head of multi-asset investment strategy at Robeco, London.
According to the International Forum of Sovereign Wealth Funds, there are over 90 sovereign wealth funds worldwide that manage over US$8 trillion in assets.
In another surprise, Trump suggested that the sovereign wealth fund could buy TikTok, whose future became a question mark after a law directing its Chinese owner, ByteDance, to sell the app on national security grounds or face a ban, came into effect on January 19.
After taking office as president on January 20, Trump signed an executive order to suspend the enforcement of the law for 75 days.
Trump said he was in talks with several parties about buying TikTok and was expected to make a decision on the future of the app in February. TikTok currently has around 170 million users in the US.
"We're going to do something, maybe with TikTok, maybe not," Trump said.
"If we get a good deal, we will do it. Otherwise, we wouldn't have made... maybe we'll put it in a sovereign wealth fund." – Agency
