The president signed an executive order last week that kicked off the process of creating a sovereign wealth fund with the goal of generating more revenue for the government.
Sovereign wealth funds invest state or government money. They’re typically created from budget surpluses or revenues from oil or other commodities.
“Other countries have wealth funds,” he said. “We have nothing,” Trump said on the campaign trail.
Sovereign wealth funds are investment funds owned by an individual state or government typically created from budget surpluses or revenues from oil or other commodities. These funds may indirectly finance domestic industries as well as a wide range of other investments.
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The order calls for the secretary of the Treasury, Scott Bessent, and the secretary of commerce, Howard Lutnick, to report back with a plan in 90 days. In a news conference on Monday, Mr. Bessent said the government would create this fund in the next 12 months.
It’s unclear where the money will come from, but we’re sure President Trump has some ideas.
NPR’s White House Correspondent, Aama Khalid, explained some ideas for funding:
A White House official said one option being explored is leveraging current assets. Trump has also mentioned revenue from tariffs. And (Brad) Setser (Council on Foreign Relations) does point out that this idea of a sovereign wealth fund has spread far beyond just oil-rich countries. China has one. So do G7 nations like France and countries with a lot of debt like Italy also have one.
There are concerns about how it would be governed.
Twenty-one US states have sovereign wealth funds.
Trump is talking about a joint venture to buy TikTok using the fund. Saudi Arabia bought the PGA Tour with theirs.
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