Fact Sheet: President Donald J. Trump Orders Plan for a United States Sovereign Wealth Fund

Fact Sheets

TLDR

This fact sheet explains the executive order directing the creation of a U.S. sovereign wealth fund, with Treasury/Commerce leading a 90-day planning process. While citing $5.7T in federal assets, the funding mechanism remains unclear given U.S. budget deficits. Implementation faces major hurdles including required Congressional approval and national security considerations, with the proposed 12-month timeline being notably aggressive.

The executive order referenced by this “fact sheet” directs the creation of a U.S. sovereign wealth fund (SWF), marking a significant shift in U.S. economic policy. Let’s analyze and evaluate the key claims:

Treasury Leadership Claim

  • Accurate: Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick have been tasked with spearheading the initiative.
  • Real Facts: The 90-day timeline for plan delivery is ambitious given that most SWFs require extensive legislative framework and typically emerge from budget surpluses or natural resource wealth, which the U.S. currently lacks.

Asset Base Claim

  • Questionable: While the fact sheet cites $5.7 trillion in federal assets, the funding mechanism remains unclear as the U.S. operates with significant budget deficits.
  • Real Facts: Unlike traditional SWF countries that fund their programs through commodity revenues or trade surpluses, the U.S. lacks these traditional funding sources.

Economic Impact Claims

  • Partially Accurate: SWFs can contribute to economic growth and stability, as evidenced by Trinidad and Tobago’s experience showing per capita GDP increases.
  • Real Facts: The claim of reducing tax burdens is speculative, as most SWFs require initial capital investment that could increase short-term fiscal pressure.

Implementation Challenges

Structural Issues

  • Congressional approval would be required, which isn’t mentioned in the fact sheet.
  • The proposed 12-month implementation timeline is extremely aggressive given the complexity.

Strategic Considerations

  • The fact sheet omits discussion of potential national security concerns that often arise with SWFs.
  • The suggestion about TikTok acquisition through the fund raises questions about government intervention in private markets.

While sovereign wealth funds can be effective tools for economic development, the fact sheet oversimplifies the challenges and requirements for establishing a U.S. SWF, particularly given the country’s current fiscal position and the complexity of required legislative changes.

DELIVERING A PLAN TO CREATE A UNITED STATES SOVEREIGN WEALTH FUND: Today, President Donald J. Trump signed an Executive Order calling for the creation of a Sovereign Wealth Fund.

  • The Executive Order directs the Secretary of the Treasury and the Secretary of Commerce to deliver a plan within 90 days for the creation of a sovereign wealth fund.

    • The Secretary of the Treasury and the Secretary of Commerce will work closely with the Director of the Office of Management and Budget and the Assistant to the President for Economic Policy to develop the plan.

    • The Order directs the Secretary to include in the plan recommendations for funding mechanisms, investment strategies, fund structure, and a governance model.

ENSURING LONG-TERM ECONOMIC COMPETITIVENESS AND FISCAL SUSTAINABILITY: The creation of a sovereign wealth fund for the United States will help maximize the stewardship of our national wealth.

  • Sovereign wealth funds exist around the world as mechanisms to amplify the financial return to a nation’s assets and leverage those returns for strategic benefit and goals.
    • The United States can leverage such returns to promote fiscal sustainability, lessen the burden of taxes on American families and small businesses, establish long-term economic security, and promote U.S. economic and strategic leadership internationally.
  • The United States already holds a vast sum of highly valued assets that can be invested through a sovereign wealth fund for greater long-term wealth generation.
    • The Federal government directly holds $5.7 trillion in assets. Indirectly, including through natural resource reserves, the Federal government holds a far larger sum of asset value.

PURSUING NATIONAL ENDEAVORS AND MAGNIFYING ECONOMIC GROWTH: President Trump has called for the creation of a sovereign wealth fund “to invest in great national endeavors for the benefit of all of the American people.”

  • President Trump’s economic policies—including the pursuit of fair and balanced trade, national energy dominance, and tax and regulatory relief to spur robust economic growth—will result in greater wealth and revenue streams that a sovereign wealth fund can maximize the potential of.

  • Sovereign wealth funds are maintained by a diverse array of countries leveraging equally varied classes of national assets. President Trump has called for a sovereign wealth fund to ensure the United States can lead the way in long-term wealth generation.

    • The United Kingdom recently announced their own plans to pursue development of such a fund.

    • In addition to countries around the world maintaining their own funds, 23 states within our own country maintain their own funds that control in total $332 billion in assets.