US President Donald Trump issued an executive order directing officials to establish a sovereign wealth fund, citing goals of fiscal sustainability, reduced taxes, and economic leadership. However, the order lacks details on funding and faces potential legal hurdles, requiring congressional approval. Experts question the feasibility of such a fund for the US, given its current budget deficit and the need for clear funding mechanisms.
Within the seemingly endless stream of executive orders that US President Donald Trump has been signing since taking office just over a fortnight ago is one directing his officials to create a sovereign wealth fund . What he left unanswered though is whether America actually need a sovereign wealth fund , and how would it finance one.
While there is bipartisan interest in the concept of an American sovereign wealth fund – the Biden administration was investigating the concept well before Trump made any public reference to one in a speech in September – once the discussion gets down to the specifics of such a fund that would divert revenue to an entity that would circumvent Congress’ control of government expenditures, the pathway towards its establishment might get steeper.
“We might put in the sovereign wealth fund, whatever we make. Or if we do a partnership with very wealthy people. A lot of options.”Others, such as Australia’s $238 billion Future Fund , tuck away their budget surpluses and any one-off windfalls either for a rainy day or to offset unfunded liabilities.
“If we make the right deal, we’ll do it. Otherwise, we won’t. 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,” he said on Monday. At best, imposing his tariffs on everyone – which would need to include Canada and Mexico – might raise $US2.5 trillion to $US3 trillion over the same period, albeit less if his targets retaliate and the global economy and global trade shrinks.Elon Musk and others are eyeing a relatively small government agency, the US International Development Finance Corp , as a potential vehicle for the fund.
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