President Trump signed an executive order Monday to create a national sovereign wealth fund, which could be used for the US to acquire a stake in TikTok. More than 100 countries have such funds, which act as national investment funds, controlling a total of more than $8 trillion in assets, the Guardian reports. "Other countries have sovereign wealth funds. They're much smaller countries. They're not the United States," Trump said Monday. "We're going to be doing something, perhaps, with TikTok. Perhaps not." Trump said the fund could also be used to pay for government investments in infrastructure.
At least 20 states have their own sovereign wealth funds, with Alaska's the largest at more than $80 billion. Trump's order directs the Treasury and Commerce departments to take steps toward setting up the fund, Politico reports. Treasury Secretary Scott Bessent said it could be formed within 12 months. He said the plan is to monetize assets owned by the US government "for the American people." Trump has said he wants the US to hold a 50% stake in TikTok when its US business gets new ownership, and the fund "could be among the cleanest ways of giving the US a stake in the company without nationalizing it," the Hill reports.
Trump didn't offer details on how the fund would be financed. Sovereign wealth funds typically receive a government's surplus as a "nest egg" for its citizens, reports Reuters, but the federal government hasn't had a budget surplus since 2001. "Given the United States' track record, a proposal that relies on hypothetical future budget surpluses is unrealistic," experts at the Center for Global Development said last month. Officials in the Biden administration also discussed setting up a sovereign wealth fund. (More sovereign wealth funds stories.)
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