President Donald Trump quickly delayed enforcement of the U.S. TikTok ban final month, stating that he meant to “negotiate a resolution” stopping the favored video sharing app from exiting the nation. Now Trump seems to have revealed at the least one plan he is contemplating — particularly, having the U.S. authorities merely purchase TikTok itself.
The president known as for the institution of a U.S. sovereign wealth fund in his newest govt order on Monday, directing new Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick to plot a plan for the fund’s creation inside 90 days. This plan is to incorporate suggestions for “funding mechanisms, investment strategies, fund structure, and a governance model.”
Very similar to different funding funds, government-owned funds purpose to construct wealth for a rustic by investing in international and home belongings equivalent to shares, bonds, and actual property. The proceeds are then added to the federal government’s funds.
Which means, if a U.S. sovereign wealth fund is created, the federal authorities could also be able to buying a big stake in TikTok.
Will the U.S. purchase TikTok?
Talking about his plans for the U.S. sovereign wealth fund, Trump particularly named TikTok for instance of an organization it would spend money on. The previous Biden administration banned TikTok within the U.S. from Feb. 19, alleging that the app is a device for Chinese language surveillance and propaganda. TikTok was thus prohibited from persevering with its operations within the nation until its mum or dad firm ByteDance offered it to an entity the U.S. deems pleasant.
After all, there is not any entity extra pleasant towards the U.S. authorities than the U.S. authorities itself.
“We’re going to be doing something perhaps with TikTok, perhaps not,” Trump acknowledged. “If we make the right deal we’ll do it, otherwise we won’t. But I have the right to do that. And we might put that in the sovereign wealth fund, whatever we make, or if we do a partnership with very wealthy people. A lot of options. But we could put that as an example in the fund.”
Trump has beforehand indicated that mentioned companions might embrace U.S. corporations Microsoft and Oracle, stating that there’s “a lot of interest” in TikTok from doable consumers.
If Trump does plan to make use of this proposed sovereign wealth fund to buy TikTok’s U.S. operations, he’ll be on a decent timeline. The non permanent keep on the app’s ban expires 75 days from Trump’s inauguration, that means the sale might should be negotiated earlier than April 5. Whereas Bessent expressed an intent to have the fund up and working inside a yr, that is nonetheless effectively previous when the TikTok ban delay expires.
Mashable High Tales
Trump might doubtlessly attempt to lengthen the delay, notably if negotiations for a sale are underway. Nevertheless, any intent to purchase TikTok in the end means nothing until ByteDance is keen to promote. The corporate has proven completely little interest in doing so, persistently sustaining that such divestment is “technologically, commercially, and legally infeasible.”
Funding the U.S. sovereign wealth fund
President Donald Trump signed his govt order regarding a U.S. sovereign wealth fund on Monday.
Credit score: Chris Kleponis / CNP / Bloomberg through Getty Photographs
No strong particulars have been supplied relating to precisely the place cash for a U.S. sovereign wealth fund may come from. Nevertheless, Trump beforehand proposed the thought of such a fund throughout his election marketing campaign, stating final September that it might be funded by “tariffs and other intelligent things.” Trump lately introduced tariffs on buying and selling companions Mexico, Canada, and China, although the previous two have now been quickly paused on the final minute.
“Other countries have sovereign wealth funds, and they’re much smaller countries and they’re not the United States,” mentioned Trump. “We have tremendous potential in this country. Tremendous.”
International locations equivalent to Singapore, Norway, and the United Arab Emirates do have already got sovereign wealth funds, nevertheless these are sometimes financed by their funds surplus. In distinction, the U.S. has persistently run at a deficit since 2002, with the nation’s nationwide debt at the moment standing at $710.9 billion.
Australia and China even have sovereign wealth funds regardless of each at the moment working at a deficit. Even so, Australia’s fund was established in 2006 throughout a string of funds surpluses, whereas China’s was funded by the sale of particular treasury bonds, long-term authorities bonds which attain maturity after a long time.
How will the U.S. sovereign wealth fund be managed?
There may be at the moment little details about how a U.S. sovereign wealth fund may be managed or operated both. Former president Joe Biden beforehand thought of the creation of a sovereign wealth fund in 2024, nevertheless points equivalent to its funding, construction, and technique have been by no means fully ironed out.
Some have speculated that unelected billionaire Elon Musk might turn into concerned within the proposed fund’s administration. It is not a wholly unreasonable notion, notably contemplating Trump’s admiration of Musk as a “great business guy.”
Musk has shortly turn into deeply concerned in U.S. federal affairs since Trump’s inauguration on Jan. 20, specializing in the nation’s funds specifically. Earlier this week, Bessent reportedly granted the Musk-led Division of Authorities Effectivity (DOGE) full entry to the federal treasury’s database and fee system, elevating alarm on the Senate Finance Committee. The White Home additional introduced on Monday that Trump has made Musk a “special government employee,” with CNN reporting that he has high secret safety clearance.
Such particular workers sometimes work for the federal authorities for as much as 130 days, whereas DOGE is scheduled to dissolve on July 4, 2026. Even so, it at the moment seems unlikely that Musk will bow out of federal affairs after both deadline has handed.
Curiously, it was lately reported that Musk turned down a dinner with the top of Norway’s sovereign wealth fund final October, taking objection to them declining him a “favour” by voting towards his $56 billion Tesla CEO compensation bundle. Norway’s fund is one in every of Tesla’s largest shareholders.
A sovereign wealth fund might allow the U.S. authorities to straight make investments not solely in TikTok, however in Tesla as effectively (although there could also be measures towards this if Musk does turn into concerned in its administration). The fund would additionally theoretically be capable of spend money on different huge tech corporations equivalent to Jeff Bezos’ Amazon and Mark Zuckerberg’s Meta. If it does, it might be a big payoff for the large tech billionaires’ efforts to endear themselves to Trump as of late.
