On February 3, 2025, U.S. President Donald Trump addressed reporters in the Oval Office, announcing a significant new initiative.
President Trump signed an executive order laying out plans to establish a government-operated sovereign wealth fund aimed at driving economic development. This fund could potentially be utilized to acquire the social media platform TikTok.
The envisioned fund would target infrastructure projects such as airports and highways. Additionally, it might enable the U.S. to extend its reach in strategic regions like Panama and Greenland. During a press briefing, U.S. Treasury Secretary Scott Bessent explained, “We’re aiming to get this off the ground within the next year. Essentially, we’ll monetize the asset side of the U.S. balance sheet for the benefit of the American public. We plan to leverage a mix of liquid assets along with other domestic assets to unlock their potential.”
Although further details weren’t disclosed, Trump alluded to the possibility of tariffs as a funding source for what he described during his campaign as backing for “great national endeavors.” Other countries often fund similar sovereign wealth funds through taxes on natural resources, financial transactions, or carbon usage.
Trump mentioned that the fund could be instrumental in a potential deal involving U.S. interests in TikTok. This comes after the app faced security scrutiny, leading to its temporary removal. However, Trump’s subsequent order has allowed TikTok a 75-day grace period to resolve Chinese ownership concerns.
While the idea of a U.S. sovereign wealth fund isn’t entirely new, such financial vehicles are traditionally the domain of smaller nations boasting abundant natural resources and budget surpluses—quite the contrast to the U.S., which has been grappling with substantial budget deficits.
Countries like China, Norway, and Singapore already operate these funds. Should the U.S. establish its own, it could bolster economic competitiveness and potentially alleviate the government’s reliance on issuing Treasury debt as a fundraising mechanism.
According to the executive order, the fund aims “to promote fiscal sustainability, reduce tax burdens on American families and small businesses, ensure economic security for future generations, and enhance U.S. economic and strategic leadership on the global stage.”
Both Treasury Secretary Scott Bessent and Howard Lutnick, the nominee for Commerce Secretary, have been entrusted with devising a strategic plan for the fund within the next 90 days.
Currently, the largest sovereign wealth fund is managed by Norway, boasting over $1.7 trillion in assets, as reported by the Sovereign Wealth Fund Institute. It’s followed by the China Investment Corporation with $1.3 trillion under management.
These funds are prominent players in global financial markets, actively investing in equities, bonds, and real estate, besides holding stakes in infrastructure and private equity. Critics have raised concerns about transparency, warning that insufficient governance could breed conflicts and corruption.
