President Donald Trump has taken significant steps towards establishing a sovereign wealth fund for the United States by signing an executive action aimed at this endeavor. Announced during a press briefing in the Oval Office, Trump emphasized the nation’s “tremendous potential,” delegating Treasury Secretary Scott Bessent and Commerce secretary nominee Howard Lutnick the responsibility to lead this initiative.
Bessent detailed the fund’s anticipated creation within the next year, highlighting it as a matter of substantial strategic importance. One of the intriguing aspects of the fund’s potential is its use in facilitating major corporate transactions, such as the ongoing discussions regarding the sale of TikTok. Trump noted that an extension he signed allowed TikTok to continue operating in the U.S., while the fund could play a role in the negotiations surrounding its future.
Lutnick suggested that the government could leverage its purchasing power in negotiations with major companies, especially in health-related contracts, such as those for Covid vaccines, proposing that the U.S. could take equity stakes in these firms during large-scale purchases. This approach resonates with previous discussions among Trump advisers who have explored using the U.S. International Development Finance Corporation (DFC) to create a system reminiscent of sovereign wealth funds.
The executive action mandates officials to present a comprehensive plan to Trump within 90 days. This plan will outline funding sources, investment strategies, potential governance structures, and any necessary legal considerations for establishing and operating the fund, including whether new legislation is required.
The concept of a sovereign wealth fund was first introduced by Trump during his presidential campaign, where he outlined the idea of creating it from tariff revenues to invest in manufacturing, defense, and medical research, to support national interests. Sovereign wealth funds are common in countries with significant foreign reserves, such as Norway and China, and are typically invested across various sectors from stocks to infrastructure.
Notably, discussions have included the possibility of modeling the U.S. fund after existing state funds, such as Alaska’s $82 billion Permanent Fund and North Dakota’s $11.5 billion Legacy Fund, which have proven effective in funding public initiatives and providing tax relief.
Overall, Trump’s executive action signals a proactive strategy aiming to enhance the U.S. economic landscape, potentially benefiting national security and fostering investments that could pave the way for long-term growth and development. As discussions progress, the initiative may shape U.S. economic policy in innovative ways that reflect modern needs and challenges.