President Donald Trump has taken a bold step by signing an executive order to create a government-run sovereign wealth fund, aimed at boosting U.S. economic development and potentially acquiring TikTok. This initiative marks a strategic move to leverage the United States' assets for national growth and influence. The fund, modeled after those of countries like China, Norway, and Singapore, aspires to develop key infrastructure such as airports and highways. Furthermore, it could extend American influence in regions like Panama and Greenland.
U.S. Treasury Secretary Scott Bessent announced the administration's plans to establish the fund within the next year. He emphasized the fund's potential to "monetize the asset side of the U.S. balance sheet for the American people." This approach aims to enhance the country's competitive edge globally while reducing reliance on issuing Treasury debt. Notably, Norway's sovereign wealth fund holds over $1.7 trillion in assets, while China Investment Corp manages $1.3 trillion.
The concept of a U.S. sovereign wealth fund is not entirely new but has been more common among smaller nations with abundant natural resources and fiscal surpluses. However, unlike these countries, the U.S. has faced significant budget deficits, adding complexity to the implementation of such a fund. Despite these challenges, the administration is determined to set up the fund within the stipulated 12-month timeframe.
"We're going to stand this thing up within the next 12 months. We're going to monetize the asset side of the U.S. balance sheet for the American people," – U.S. Treasury Secretary Scott Bessent
The proposed fund will comprise both liquid assets and existing U.S. assets, with a primary goal of benefiting American citizens. It is touted as an economic tool that could see potential partnerships with digital platforms like TikTok, further extending its scope beyond traditional investments.