U.S. to create sovereign wealth fund, per Trump order

On Monday, President Donald Trump ordered Secretary of the Treasury Scott Bessent and other officials to craft a plan within 90 days for the establishment of a sovereign wealth fund. A sovereign wealth fund functions as a government investment account, allowing the government to invest in foreign financial assets and generate income, according to the International Forum for Sovereign Wealth Funds.

In remarks in the Oval Office Monday, Trump gave TikTok as an example of a company the United States could put in its portfolio. Secretary of Commerce nominee Howard Lutnick added that, given the size of the U.S. government, maybe it should have equity in companies that it buys vaccines from or does other business with.

Countries that have such funds include China, South Korea, Qatar, Turkey, and Egypt. China established its sovereign wealth fund, the China Investment Corporation, in 2007, the Congressional Research Service reported in 2010. Beijing had only $1.4 trillion in assets in the fund at the time of its creation. Within three years, it had $2.4 trillion in assets it was managing within the fund, the CRS said.

So the United States doesn’t already have one of these? Nearly half of U.S. states have sovereign wealth funds that hold a total of roughly $332 billion in assets, according to a fact sheet the White House published alongside Trump’s order. However, the U.S. government does not currently possess a sovereign wealth fund.

So what is this sovereign wealth fund going to do? Trump’s fact sheet explained that the sovereign wealth fund would help the government generate revenue off many of its investments. Currently, the United States owns roughly $5.7 trillion in direct holdings overseas and even more in indirect holdings, Trump said. Consolidating those holdings under a sovereign wealth fund would help them make money for the United States, he explained.

Dig deeper: Read my report in The Sift about Bessent’s confirmation vote for the position of Secretary of the Treasury.