The executive order aims to create a sovereign wealth fund to finance government projects and potential acquisitions, including TikTok.
On October 30, 2023, President
Donald Trump signed an executive order directing the U.S. Treasury and Commerce departments to take initial steps towards the establishment of a U.S. sovereign wealth fund.
This fund is expected to be operational within the next year as indicated by Treasury Secretary Scott Bessent.
The primary purpose of the sovereign wealth fund is to finance significant government projects and strategic investments, particularly in critical sectors such as supply chains.
The President proposed that the fund could allocate resources for major infrastructure developments, including highways and airports, while also investing in advanced defense capabilities and medical research.
Moreover, President Trump mentioned the potential use of the fund in facilitating the acquisition of TikTok, suggesting that the acquisition could take the form of either a direct purchase or through partnerships with affluent investors.
Although specific details of the potential TikTok deal were not disclosed, Trump noted that any arrangements would need to be carefully considered.
Previously, conversations regarding a joint venture to allow the U.S. to acquire a 50% stake in TikTok were conducted, an initiative that has raised significant legal and regulatory concerns.
Further, Howard Lutnick, Trump’s nominee for Commerce Secretary, suggested that the sovereign wealth fund could also target investments in companies holding substantial government contracts, such as those engaged in
COVID-19
vaccine production.
This initiative comes after similar discussions among Democratic leaders, who have contemplated the benefits of creating a sovereign wealth fund, a model that has been effectively utilized in various countries, particularly in the Middle East and Europe.
Despite the ambitious plans articulated in the executive order, questions linger regarding the alignment of the fund's timeline with ongoing efforts to address the national security implications surrounding TikTok, with the app currently facing scrutiny.
As of now, the White House has not released additional specifics regarding this executive order.