Donald Trump Video Clip from NBS Television
In a bold and unprecedented move, U.S. President Donald Trump signed an executive order on Monday, setting the stage for the creation of a sovereign wealth fund within the next year—one that could, astonishingly, be used to acquire the wildly popular short-video app TikTok. If realized, this fund would catapult the U.S. into the ranks of nations across the Middle East and Asia that have harnessed sovereign wealth funds to wield financial power on a global scale. With this decision, Trump signals a dramatic shift in America’s investment strategy, one that could reshape the landscape of government-backed financial influence.
The official declaration stated that the creation of a sovereign wealth fund for the United States “will help maximize the stewardship of our national wealth and that as sovereign wealth funds exist around the world as “mechanisms to amplify the financial return to a nation’s assets and leverage those returns for strategic benefit and goals,” the US can leverage such returns to “promote fiscal sustainability, lessen the burden of taxes on American families and small businesses, establish long-term economic security, and promote U.S. economic and strategic leadership internationally.”
“We’re going to create a lot of wealth for the fund. I think it’s about time that this country had a sovereign wealth fund,” President Trump said in the Oval Office on Monday. “I think in a short period of time, we’d have one of the biggest funds.”
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U.S. Treasury Secretary Scott Bessent said, “We’re going to monetize the asset side of the U.S. balance sheet for the American people. There’ll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people.”
Bessent said the sovereign wealth fund would be set up within the next 12 months.
President Trump implied that the sovereign wealth fund could buy out the American operations of TikTok saying, “We’re going to be doing something perhaps with TikTok and perhaps not.”
TikTok was ordered to shutter its operations in the U.S. because it is owned by the Chinese government and poses concerns over security risks, both public and private. However, upon taking office Trump gave TikTon a 75 day reprieve in order to find time to find an American buyer.
However, challenges may be made to the fund’s establishment on constitutional grounds because the U.S. president may not be authorized to create one by executive order.
A sovereign wealth fund (SWF) is a state-owned investment fund that invests in a variety of assets, such as stocks, bonds, real estate, and other financial instruments. SWFs are typically funded by revenues from commodity exports, such as oil or natural gas, or from foreign exchange reserves held by the central bank.
SWFs are often managed by a government-owned investment company, and they can be invested both domestically and internationally.
Sovereign wealth funds can play an important role in the global economy, as they can invest in a variety of assets and help to stabilize markets. However, they can also be controversial, as some people worry that they could be used for political purposes.
