USA to Buy TikTok? Trump’s Sovereign Wealth Fund Sparks Controversy
In an unprecedented executive order, U.S. President Donald Trump signed to create America’s very first sovereign wealth fund-a move that opens the door for the USA to buy TikTok or taking a significant stake in the hugely popular social media app.
The initiative, with leaders Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick, proposes to monetize the U.S. assets for development and value-add investments in core industries, infrastructure, and national security projects. While sovereign wealth funds usually exist in the resource-rich nations of Norway, China, and Saudi Arabia, for the United States, this is a financial instrument that is now being explored to leverage for enhancing economic competitiveness.
Trump’s Plan: A Sovereign Wealth Fund the Door for USA to Buy TikTok?
Among the most strikingly set proposals the sovereign wealth fund could find itself attached to is purchasing TikTok, which has been directed to divest from its Chinese parent company, ByteDance, within 75 days over national security concerns.
Still, President Donald Trump has shown interest that the aim is going to enable American ownership of TikTok, according to him:
“We might put [TikTok] in the sovereign wealth fund, whatever we make, or have a partnership for it with very wealthy people. A lot of options out there.”
If successful, such a sovereign wealth fund could allow for the USA to buy TikTok at a minimum, thus cutting Chinese stakes on the TikTok platform while sharply ramping up U.S. control over the same. Other interested investors include billionaire Frank McCourt, former treasury secretary Steven Mnuchin, and even Microsoft, all lining up to acquire TikTok’s U.S. operations. But Trump’s way looks at the government itself as facing an instance where it could that could end up holding stake in the platform.
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How the U.S. Sovereign Wealth Fund Will Work
Unlike countries that fund sovereign wealth funds through surplus budgets or natural resource revenues, the U.S. is facing huge budget deficits. Trump has hinted that tariffs, asset sales, and strategic investments could finance the initiative.
Preliminary reports indicate the sovereign wealth fund could invest in national infrastructure projects beyond TikTok, including:
- airports and highways;
- strategic geopolitical ventures in regions like Panama and Greenland; and
- economic growth initiatives that would support U.S. Treasury help.
But broadband deployment is not likely, according to recent stories in the press as other administrations had pushed more.
A Bolder Move or a Risky Gamble?
While Trump’s sovereign wealth fund is well received by its proponents as a tool for economic expansion and settling foreign dependence, critics see it as follows:
- The U.S. does not have a pool of surplus funds through which to support this venture.
- The transparency and governance of the fund remained shaky.
- Monetizing U.S. assets might not be such an easy task due to its budgeting deficits.
Some experts caution that although long-term investments are supported by other means in Norway’s $1.8 trillion fund, the U.S. seems not to have provided a framework for a viable funding mechanism.
Trump and Biden: A Rare Consensus on Sovereign Wealth Funds
Notoriously at odds due to their politics, Trump and former president Biden both favored the establishment of a U.S. sovereign wealth fund, arguing that it should spur domestic investment and drive economic resilience. In contrast to Biden, who aspired for the fund to purchase national security investments, Trump’s version was more on economic development and strategic investment into Telecom companies.
While the U.S. mulls a TikTok buy and creation of its first sovereign wealth fund, it is setting the stage for an unprecedented era of government-led investments-neat or now.
Whether this new experiment will bear fruit or find major roadblocks, though, is yet to be seen.
Conclusion
With the launching of the U.S. sovereign wealth fund, America has made an unprecedented shift in its economic policy, one likely to draw sharp debate over its possible role in aiding the USA to acquire TikTok. If successfully implemented, it could alter investment possibilities in America, boost economic security, and set a precedent for government-backed investments. However, with major funding and governance questions still not resolved, Trump’s sovereign wealth fund is not unlikely to succeed.
References:
https://thehill.com/policy/technology/5123461-trump-sovereign-wealth-fund-tiktok
https://broadbandbreakfast.com/u-s-government-may-buy-tiktok-under-trumps-new-wealth-fund
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