Trump Signs Executive Action to Create US Sovereign Wealth Fund

President Donald Trump has signed an executive order to establish a sovereign wealth fund for the United States, a move he first floated during his presidential campaign. The action, announced in the Oval Office on Monday, directs Treasury Secretary Scott Bessent and Howard Lutnick, the nominee for Commerce secretary, to spearhead the effort.

"We have tremendous potential," Trump told reporters. The fund is expected to be operational within the next 12 months, with Bessent calling it an issue "of great strategic importance."

Trump suggested the fund could play a role in facilitating the sale of TikTok, which is currently operating in the US due to an extension he granted for a forced sale or shutdown. Lutnick argued that the US government's vast purchasing power could be leveraged to benefit taxpayers.

"If we are going to buy two billion Covid vaccines, maybe we should have some warrants and some equity in these companies," Lutnick said.

The executive order mandates that officials submit a comprehensive plan to Trump within 90 days, outlining funding sources, investment strategies, fund structure, governance, and a legal assessment of the fund's establishment and operation.

The initiative builds on prior discussions among Trump advisors about utilizing the US International Development Finance Corporation (DFC) to strategically partner with major institutional players and enhance US economic influence. Key figures driving this approach, according to sources close to the president's transition team, include Elon Musk and Stephen Feinberg, Trump's nominee for deputy defense secretary.

Trump also announced on Friday his nomination of Ben Black to lead the DFC.

The concept of a US sovereign wealth fund was initially raised by Trump during a September campaign address at the Economic Club of New York, where he proposed channeling funds from tariffs into a wealth fund that would invest in key sectors like manufacturing, defense, and medical research.

"We will create America’s own sovereign wealth fund to invest in great national endeavors for the benefit of all the American people," Trump stated at the time.

He suggested that Wall Street and corporate leaders could play a crucial advisory role in guiding investment decisions.

Sovereign wealth funds are common in countries possessing substantial foreign exchange reserves (like China) or significant revenue from commodity sales (such as Norway and Saudi Arabia). These funds typically invest across a broad spectrum, encompassing stocks, bonds, infrastructure, and technology.

"We’re going to monetize the asset side of the US balance sheet for the American people," Bessent noted. "It’ll be a combination of liquid assets, assets we have in this country as we work to bring them out for the American people."

The move follows a similar initiative by former President Joe Biden, who was also developing a proposal for a fund focused on national security interests, including technology, energy, and supply chain resilience.

Twenty US states currently operate sovereign wealth funds, primarily funded by commodity or land-based revenue. The largest of these is the Alaska Permanent Fund, established in 1976, which currently manages approximately $82 billion. Another prominent example is North Dakota's $11.5 billion Legacy Fund, created in 2010.