Trump Orders Creation of Sovereign Wealth Fund, Says it Could Buy TikTok
The Facts
US Pres. Donald Trump signed an executive order on Monday directing his government to create a sovereign wealth fund, stating that it could be used to purchase social media app TikTok amid uncertainty about the platform's operability in the US.
More than 90 countries, often those with large exports from natural resources, operate sovereign wealth funds, investing surplus income in securities and companies and later using the funds to pay for government initiatives. Twenty-three US states also have sovereign wealth funds totaling $332B in assets.
However, the US government has historically run on a budget deficit — with only four budget surpluses recorded over the last 50 years — raising questions as to how Trump plans to finance the initiative.
The Spin
Narrative A
The US would significantly benefit from its own sovereign wealth fund, as the country already has the world's largest finance sector and the brightest financial minds to manage it. This would allow for strategic investments of surplus revenues into a diversified portfolio, ensuring long-term economic stability funding national projects, and enhancing global influence. It would also counter foreign adversaries by bolstering US companies while promoting American values.
Narrative B
This idea is severely misguided, especially as it pertains to using such a fund to purchase TikTok. The US, with a $35T debt and no budget surplus, isn't suited for a sovereign wealth fund, which typically relies on what the US lacks — resource revenue. Funding it through vague means like tariffs is also impractical. Besides the impracticality of Trump's fundraising claims, his mention of using it to purchase TikTok proves this to be a stunt to distract from America's real financial issues.
