Trump orders creation of US sovereign wealth fund, says it could buy TikTok
Although the funding source is unknown, Trump has previously cited tariffs as a source.
According to reports, the Biden administration looked into creating a fund to increase global competitiveness.
More than eight trillion dollars’ worth of assets are managed by more than 90 such funds worldwide.
Reuters, Washington, Feb. 3 On Monday, U.S. President Donald Trump issued an executive order directing the establishment of a sovereign wealth fund within the next year, with the possibility that the fund will purchase the TikTok app for short videos.
If established, the sovereign wealth fund would put the United States in the same league as many other nations, especially in Asia and the Middle East, that have established funds of a similar nature to make direct investments using public assets.
Economics ‘don’t add up
Wall Street investors felt the news was unexpected.
According to Colin Graham, head of multiasset strategies at London-based Robeco, “establishing a sovereign wealth fund suggests that a country has savings that will go up and can be allocated to this.” “The general economic principles don’t add up.”
The International Forum of Sovereign Wealth Funds reports that there are more than 90 of these funds worldwide, overseeing assets worth over $8 trillion.
Trump’s suggestion that the wealth fund purchase TikTok, whose US future has been uncertain since a legislation mandating its Chinese owner, ByteDance, to sell the app on national security grounds or risk a ban, went into effect on January 19, was another unexpected turn of events.
Following his inauguration on January 20, Trump issued an executive order attempting to postpone the law’s implementation by seventy-five days.
Trump has stated that he has been in discussions with several individuals regarding the acquisition of TikTok and is expected to make a decision regarding the app’s future this month. The well-known app has roughly
Trump orders creation of sovereign wealth fund, says it could buy TikTok
According to an executive order signed by US President Donald Trump, a sovereign wealth fund will be established within the next year with the possibility to purchase the TikTok app for short videos.
There was little information provided by Trump on Monday, and it was unclear how such a wealth fund would operate. The US government runs at a deficit, yet these funds usually rely on a nation’s budget surplus to make investments. Additionally, Congress would probably need to approve its existence.
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Trump assured reporters, “We’re going to generate a lot of wealth for the fund.” “And I believe that this nation should have a sovereign wealth fund long ago.”
As a presidential candidate, Trump has previously proposed such a government investment organization, claiming it could finance “great national endeavors” including manufacturing, medical research, and infrastructure projects like highways and airports.
Although Trump has previously stated that the fund might be supported by “tariffs and other intelligent things,” administration officials did not specify how the fund would function or be financed.