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Trump Orders Creation Of US Sovereign Wealth Fund That May Buy Part Of TikTok
If President Donald Trump is successful in finding an American buyer for TikTok, he has signed an executive order instructing the US to begin creating a government-owned investment fund that could be used to benefit from the company.
On his first day in office, Mr. Trump issued a directive giving TikTok until early April to find a buyer or partner that he approves of, but he has stated that he wants the US to own half of the huge social media company.
“We might put that in the sovereign wealth fund, whatever we make or we do a partnership with very wealthy people, a lot of options,” he said of TikTok. “But we could put that as an example in the fund. We have a lot of other things that we could put in the fund.”
Real estate, stocks, and bonds are among the assets that sovereign wealth funds invest in. Usually, they are financed by a nation’s budget surpluses, which the US does not currently have.
According to Mr. Trump, the US may surpass Saudi Arabia in fund size in the future. He also pointed out that many other countries have similar investment funds. “We’ll catch it eventually,” he assured.
According to The International Forum of Sovereign Wealth Funds, a London-based organization composed of about 50 sovereign wealth funds, there are over 90 sovereign wealth funds worldwide that oversee assets worth over eight trillion dollars.
According to research from the nonpartisan think tank Centre for Global Development in Washington, there are over 20 sovereign wealth funds at the state level in the United States. The biggest ones, with headquarters in Alaska, New Mexico, and Texas, are funded by oil, gas, and mineral revenues and are utilized to support in-state initiatives like education.
Despite being government-owned, these funds often function as independent organizations with their own staff and investment strategy, according to the institute.
The president assigned Howard Lutnick, Mr. Trump’s choice for commerce secretary, and Treasury Secretary Scott Bessent to build the foundation for the fund’s creation, which would probably need congressional approval.
According to the presidential order, Mr. Trump must receive a strategy for the fund within ninety days, which must include suggestions for investment methods and a governance mechanism.
Before his departure last month, former President Joe Biden’s administration had considered the notion of setting up a sovereign wealth fund for investments in national security, but no real progress had been made on the matter.
While Mr. Lutnick stated that the government might have used the fund to acquire a profit-earning stake in vaccine makers, Mr. Bessent stated that the administration’s objective was to have the fund operational within the next 12 months.
Mr. Lutnick told reporters, “American citizens should benefit from the extraordinary size and scope of the US government and the business it does with companies.”
According to federal legislation that requires ByteDance to sell off its shares or risk being prohibited, TikTok was set to be outlawed in the US last month. With bipartisan support in Congress, the measure was passed in April and signed into law.
While Mr. Lutnick stated that the government might have used the fund to acquire a profit-earning stake in vaccine makers, Mr. Bessent stated that the administration’s objective was to have the fund operational within the next 12 months.
Mr. Lutnick told reporters, “American citizens should benefit from the extraordinary size and scope of the US government and the business it does with companies.” According to federal legislation that requires ByteDance to sell off its shares or risk being prohibited, TikTok was set to be outlawed in the US last month. With bipartisan backing in Congress, the measure was passed in April and signed by Mr. Biden.
The statute was swiftly challenged in court by the two businesses and a few users, and the case was eventually upheld.