Trump Announces Sovereign Wealth Fund Plan, Sparking Debate on Benefits and Risks

Trump Announces Plan for Sovereign Wealth Fund

President Donald Trump announced on Monday his intention to create a sovereign wealth fund, a pool of assets similar to those found in other countries, which could be used to distribute regular payments to American citizens. The announcement was made during an Oval Office ceremony, though details on the fund's operation remain unclear.

Trump initially proposed the idea of a sovereign wealth fund during his 2024 presidential campaign. Treasury Secretary Scott Bessent provided a brief overview of the fund at the ceremony, describing it as a collection of "liquid assets" that would be utilized for the benefit of the American people.

The establishment of the fund could take up to a year, with Commerce Secretary Howard Lutnick playing a key role in its development. Lutnick suggested the fund could potentially be used to acquire TikTok, although he did not elaborate on the specifics of such a transaction.

Lutnick emphasized the potential for the U.S. government's vast business dealings to generate value for American citizens. He proposed exploring options such as acquiring warrants and equity in companies that receive large government contracts, allowing the American people to benefit from the growth of these companies.

Norway currently boasts the world's largest sovereign wealth fund, which invests oil revenues in assets such as stocks. The fund's net worth equates to roughly $325,000 per Norwegian citizen. Other countries with substantial sovereign wealth funds include China, Saudi Arabia, Australia, Iran, and Russia. Additionally, Alaska and Texas operate state-run funds.

A 2024 study by the Carnegie Endowment for International Peace cautioned that sovereign wealth funds, without proper safeguards such as governance and regulatory structures, can become susceptible to corruption, money laundering, and other illicit activities.