NIXSolutions: Sovereign Wealth Fund Plans in the US

Having largely addressed primary political and economic tasks, US President Donald Trump has shifted focus to medium-term issues. In line with one of his campaign promises, he has ordered the creation of a sovereign wealth fund, which could later be used to purchase TikTok. The US Departments of Commerce and the Treasury are tasked with developing a plan for the fund within 90 days, including recommendations for its financing and management.

NIX Solutions

Similar funds exist worldwide—over 90 sovereign wealth funds manage a total of approximately $8 trillion in assets. However, these funds are typically financed by budget surpluses, whereas the US operates with a deficit. Previously, Trump suggested the fund could be replenished through customs tariff revenues and other “innovative methods.” Congressional approval will likely be required for its establishment.

Investment Focus and Potential Acquisition

The fund’s resources are intended to support national infrastructure projects, including road networks, airports, industrial production, and medical research. The goal is to have the fund operational within 12 months. One proposal suggests repurposing the US International Development Finance Corporation (IDFC), which currently supports developing economies, into a sovereign investment fund. Reports indicate that similar discussions took place under President Biden’s administration.

Several US states, including Alaska, Texas, and New Mexico, already manage their own investment funds, primarily financing education and tax reductions, notes NIXSolutions. These state-level funds are often replenished through revenue from natural resource sales or land transactions. Trump stated that if no suitable buyer emerges for TikTok’s American assets, the newly established sovereign fund could acquire them. The final decision on TikTok’s future in the US is expected this month.

We’ll keep you updated on further developments.