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Executive order would establish US sovereign wealth fund

Fund's structure and whether it can be created simply via executive order not immediately clear

President Donald Trump reviews the troops, starting with the U.S. Army Band "Pershing's Own," in Emancipation Hall after being sworn in at the Capitol on Jan. 20.
President Donald Trump reviews the troops, starting with the U.S. Army Band "Pershing's Own," in Emancipation Hall after being sworn in at the Capitol on Jan. 20. (Bill Clark/CQ Roll Call)

President Donald Trump signed an executive order Monday to begin the process of creating what would be the first U.S. sovereign wealth fund, a government-owned investment vehicle that he said would create “a lot of wealth” for taxpayers.

The order directs Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick to develop a plan for creating the fund within 90 days. “It’s a very exciting event,” the president said in the Oval Office. “We’re going to have a sovereign wealth fund, which we’ve never had.”

As an example, he said, the fund could become a depository for a partial U.S. ownership stake in the Chinese-owned social media app TikTok, if such a deal materialized. “We might put that in the sovereign wealth fund, or whatever we make,” Trump said. “We might do a partnership with very wealthy people.’

Sovereign wealth funds are prevalent throughout the industrialized and developing world, with the largest ones residing in oil-rich states like Norway, Saudi Arabia and other Persian Gulf nations as well as China, Singapore and Hong Kong.

The largest 100 funds currently manage nearly $14 trillion in assets, according to the Sovereign Wealth Fund Institute. That includes a handful of U.S. states such as Alaska, Texas, New Mexico and others that have set up their own types of government-run funds initially financed by oil, gas and mineral resources. Trump now wants to do the same at the federal level.

But it wasn’t immediately clear how the fund would be structured or whether it could be created simply through an executive order. The order calls for the plan to include “an evaluation of the legal considerations for establishing and managing such a fund, including any need for legislation.” It said the plan would also make recommendations “for funding mechanisms, investment strategies, fund structure, and a governance model.”

Critics had panned the idea as an unworkable sop to wealthy investors when Trump first floated the idea as a candidate last year. Trump’s sovereign wealth fund “would likely hand over trillions to be managed by cronies charging outrageous fees while steering billions of dollars of investment to himself and his family,” Brendan Duke, senior director for economic policy at the left-leaning Center for American Progress, wrote on X, formerly Twitter, when the proposal was made last fall.

“We’re going to stand this thing up within the next 12 months,” said Bessent, who attended the signing ceremony with Lutnick. “We’re going to monetize the assets side of the U.S. balance sheet for the American people. We’re going to put the assets to work and I think it’s going to be very exciting.”

Lutnick said the fund could produce wealth by leveraging the enormous amount of contracting the federal government conducts with businesses. “The extraordinary size and scale of the U.S. government and the business it does with companies should create value for American citizens,” he said. “If we are going to buy 2 billion COVID vaccines, maybe we should have some warrants and some equities in these companies and have that grow for the health of the American people.”

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