Donald Trump, president of the United States, has signed an executive order to create a sovereign fund of wealth that could serve to acquire American Tiktok operations, among other things. The republican leader has expressed on multiple occasions that he will work to keep the app China in operation within the country.
On January 19, the American protection law against applications controlled by foreign adversaries entered into force. This regulation forces Bytedance, the Tiktok parent company, to sell its subsidiary in the United States to a non -Chinese owner to continue operating the country. The transaction has not been completed, which led to application stores to suspend the distribution of the software and data storage and processing companies to interrupt the services provided to the platform.
Bytedance suspended the operation of its popular service for less than 24 hours. Trump signed an executive order that extended the application of the regulatory framework for 75 days. The Asian company thanked the support of the president. In a statement, he stressed that the decision provided clarity and guarantees to its service providers. “It is a firm position in favor of the first amendment and against arbitrary censorship. We will work with the federal government in a long -term solution that keeps Tiktok in the United States, ”he said.
Trump has held conversations with various organizations and entrepreneurs about the possible purchase of the application. Now it has suggested that the new sovereign background of wealth could be used for the United States government to acquire Tiktok. “We will do something, maybe with Tiktok or maybe not. If we reach the right agreement, we will. Perhaps we put it in the sovereign background of wealth, “he said in a statement resumed by Reuters.
Trump’s proposal may not be viable
Sovereign wealth funds are financial instruments that allow states to administer asset portfolios to make investments in shares, bonds, infrastructure and technology. In most cases they depend on the budget surplus of a country, a condition that the United States does not meet, since it operates with fiscal deficit.
Colin Graham, responsible for multi -active strategies of the Robeco Asset Management Company, explains that “the creation of a sovereign background of wealth suggests that a country has savings that can be used for that fund to make them grow. [En el caso de Estados Unidos] The general economic rules do not fit. “
The executive order signed by Trump It does not specify how the new fund will be financed or how it will be financed. The document only instructs the Treasury and Commerce departments to present, within 90 days, a strategy for its creation. This plan should include recommendations on subsidy mechanisms, investment strategies, fund structure and a governance model.
Scott Besent, secretary of the Department of Treasury, has indicated that the fund will be established in the next 12 months. “We are going to monetize the assets of the United States balance for the benefit of the people. There will be a combination of liquid assets and other resources within the country, which we will work to make them available to citizens,” he said.
A report from Bloomberg He points out that the Trump administration has considered transforming the International Financial Corporation for Development (DFC) into an entity that works similarly to a sovereign fund of wealth. At present, the DFC finances development projects in various regions of the world. The ruler has also proposed that this state investment vehicle could be financed through tariffs and other fiscal policies.
Clemence Landers, vice president of the Center for Global Development, adds that the creation of the Fund will require the intervention of Congress. “You cannot create an entity of this nature through an executive order and, more importantly, it cannot be financed only by a decree,” he says.
Some US entities such as Alaska, Texas and New Mexico have their own patrimonial funds aimed at financing projects in education and tax reduction. These depend largely on the income generated by the exploitation of local natural resources.
Worldwide there are about 90 sovereign funds of wealth that manage more than 8 billion dollars in assets, according to the International Forum of Sovereign Funds. Among the largest are that of Norway with 1.8 billion dollars, that of China with 1.3 billion and that of Abu Dhabi with 1.1 billion.
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