Washington [US], February 4: On February 3, US President Donald Trump signed an executive order establishing the country's first sovereign wealth fund, opening a mechanism that promises to be able to buy TikTok from China.
The executive order is short on details and simply directs the Treasury and Commerce departments to submit a plan for the fund within 90 days . The plan must include recommendations on the funding mechanism, investment strategy, fund structure and management model, Reuters reported on February 4.
Administration officials have not said how the fund would be funded or operated, but President Trump has previously said its funding could come from "tariffs and other smart things."
Present in the Oval Office as the executive order was signed, Treasury Secretary Scott Bessent said the fund would be operational within 12 months.
Although he has not publicly mentioned the use of the fund, President Trump cited an example of using the sovereign wealth fund to acquire TikTok .
What is a sovereign wealth fund?
A sovereign wealth fund is a government-owned fund that includes investments in foreign assets. In TikTok's case, it could be used to buy TikTok's US assets from its parent company ByteDance if the company agrees to sell.
According to Reuters, the sovereign wealth fund's cash flow can come from surplus reserves, trade surpluses, foreign exchange operations, funds from privatization activities and government payments.
The world's largest sovereign wealth fund is currently the Norwegian Government Pension Fund Global Fund, which was established in 1990. As of January, the fund had more than $1.7 trillion, according to Investopedia.
Source: Thanh Nien Newspaper