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US President Donald Trump signed an executive order on Monday (Feb. 4) directing the Treasury and Commerce Departments to set up a sovereign wealth fund. He also mentioned that this fund could potentially be used to buy the social media platform TikTok.
A sovereign wealth fund would basically serve as an investment fund for the country, running separately from the Federal Reserve and the Treasury Department. However, not many details were shared about how it would be created. Since it would need approval from Congress, there are still big questions like where the money for this fund would actually come from.
Speaking from the Oval Office, Trump stated: “I think it’s about time that this country had a sovereign wealth fund.
“I think in a short period of time, we’d have one of the biggest funds.”
In relation to the video sharing platform, he said: “We’re going to be doing something perhaps with TikTok, and perhaps not.”
🚨BREAKING: President Trump just launched America’s Sovereign Wealth Fund.
With Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick, Trump signed an executive order to turn U.S. assets into generational https://t.co/778lGggb3x more foreign looting. pic.twitter.com/FPO4gYW2LS— Scott Bessent (@realscottBesent) February 3, 2025
Treasury Secretary Scott Bessent added: “We’re going to stand this thing up within the next 12 months.”
Without going into further details, he continued: “We are going to monetize the asset side of the U.S. balance sheet for the American people.”
In January, Trump signed an executive order pausing the law banning the China-owned social media app. At the time, ReadWrite reported that the 47th president claimed that he was in talks with multiple interested parties about the purchase of TikTok.
What is a sovereign wealth fund and could TikTok be sold?
Sovereign wealth funds are quite common in countries that are rich in oil and tend to have budget or trade surpluses, which are mostly outside the Western world.
The US, on the other hand, hasn’t had much experience with budget surpluses. In fact, according to federal data, it’s only happened four times in the last 50 years, with the most recent one in 2001. Some of the biggest sovereign wealth funds belong to countries like Norway, China, Abu Dhabi, and Singapore. These funds are usually kept separate from central banks or finance ministries to avoid political interference, according to a recent analysis.
The Biden administration had also been exploring the idea of creating a sovereign wealth fund. But their focus seemed to be on investing in areas tied to national security, such as technology, energy, and supply chains, rather than something like acquiring a social media platform.
Setting up a fund like this wouldn’t be simple as it would need approval from Congress. But as The New York Times pointed out last year, lawmakers might not be too eager to sign off on something that could sidestep their authority over federal spending.
Featured image: Grok
