President Donald Trump has signed an executive order to establish the United States’ first-ever sovereign wealth fund, a major move aimed at leveraging national assets to generate long-term economic benefits for American citizens. Trump described the initiative as a way to “create value” and reduce the tax burden on families by making strategic investments in industries that will fuel future growth.
The proposed fund will be managed by the U.S. Treasury and Commerce Departments, with plans to begin operations within the next 12 months. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have been tasked with developing the fund’s structure, including identifying key investments and potential funding sources.
What Is a Sovereign Wealth Fund?
A sovereign wealth fund is a state-owned investment vehicle used to manage national assets and invest in areas that can provide financial returns. Countries such as Norway, China, and Saudi Arabia have long used sovereign wealth funds to manage revenues from oil, gas, and other natural resources.
The U.S., with an estimated $5.7 trillion in direct federal assets and significant natural resource reserves, will use this new fund to invest in critical sectors such as infrastructure, manufacturing, technology, and renewable energy. Trump has highlighted that part of the fund’s purpose is to “boost American competitiveness and secure economic independence.”
A Bold Proposal: Potential Investments
Trump has hinted that the fund could be used to acquire or invest in strategic assets, including companies that pose national security concerns. One notable example is the potential purchase of TikTok’s U.S. operations, a move that has gained renewed interest after previous failed attempts to force a sale of the social media giant. “We want to make sure that America retains control over key technologies,” Trump said.
Supporters See Opportunity, Critics See Risks
Supporters of the initiative argue that a well-managed sovereign wealth fund could unlock enormous economic potential and help the U.S. compete globally. By investing in emerging industries, the government could generate returns while reducing reliance on tax revenue to fund key projects.
However, critics warn of potential downsides. Sceptics argue that government-managed funds could suffer from inefficiency, political interference, and poor returns compared to private investment firms. “There’s no guarantee that this will work,” said a senior economist at the Peterson Institute for International Economics. “We could end up spending taxpayer dollars on bad investments.”
Next Steps
The executive order requires the Treasury and Commerce Departments to submit a detailed plan within the next year, outlining how the fund will operate, where the initial capital will come from, and how returns will be distributed to benefit Americans. As the administration moves forward, both Wall Street and Washington will be watching closely.