President Donald Trump on Monday said that the newly created US sovereign wealth fund could buy the short-video app TikTok. He signed an executive order ordering the Treasury and Commerce Departments to create a sovereign wealth fund.
“We're going to stand this thing up within the next 12 months. We're going to monetize the asset side of the US balance sheet for the American people. There'll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people,” said Treasury Secretary Scott Bessent.
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Right deal?
TikTok, owned by China's Bytedance, restored services to US users in January after a brief blackout as Trump assured that he would pause a federal ban on the app after assuming power on January 20. Later, Trump signed an executive order seeking to delay by 75 days the enforcement of the law.
TikTok was forced to shut down briefly due to “national security concerns”. The order also demanded Bytedance to cut ties with the app's US operations. However, it also allowed a sitting president to grant a 90-day extension if a viable sale was underway.
{{/usCountry}}TikTok was forced to shut down briefly due to “national security concerns”. The order also demanded Bytedance to cut ties with the app's US operations. However, it also allowed a sitting president to grant a 90-day extension if a viable sale was underway.
{{/usCountry}}Trump had said he wanted to give the company more time to “make a deal” to comply with a federal order. The Republican said he “would like the United States to have a 50 per cent ownership position in a joint venture,” claiming that the app's value could surge to “hundreds of billions of dollars -- maybe trillions”.
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Details on US Sovereign Wealth Fund
During the presidential campaign, Trump floated the idea of a US sovereign wealth fund. The Republican said it could fund "great national endeavours" like infrastructure projects such as highways and airports, manufacturing, and medical research. He also said that it could be funded by “tariffs and other intelligent things”.
Reuters reported that details on the sovereign wealth fund were not immediately available. Such funds rely on a country's budget surplus to make investments, whereas the US federal government runs a fiscal deficit.
According to the International Forum of Sovereign Wealth Funds, over 90 such funds manage over $8 trillion in assets worldwide.
(With Reuters inputs)