US President Donald Trump signed a decree to create a sovereign wealth fund within a year and said it could potentially buy the TikTok app. This is reported by the US White House website and Reuters.
Trump’s executive order provides few details about the US fund. Still, it states that the Treasury Department and the Department of Commerce must submit a plan to create such a fund within 90 days and provide recommendations on “financing mechanisms, investment strategies, fund structure, and governance models.”
Sovereign wealth funds allow countries with them to make direct investments using public dollars in infrastructure, education, healthcare, and science. Usually, the funds are financed by the country’s budget surplus. However, the United States is running a deficit. Therefore, the creation of the fund is likely to require Congressional approval.
Donald Trump suggested that the fund could buy TikTok: “We’re going to do something, maybe with TikTok, maybe not. If we make the right deal, we will do it. Otherwise, we won’t… we could put it in a sovereign wealth fund.”
When Trump was still a presidential candidate, he announced the creation of such a public investment vehicle. He said it would fund “great national endeavors” such as new highways and airports, manufacturing, and medical research.
US administration officials did not say how the fund would work or be financed. Still, Trump suggested it would be filled with money from “tariffs and other smart things.”