US President Donald Trump signed an executive order on Monday ordering the creation of a sovereign wealth fund within the next year, saying it could potentially buy the short video app TikTok.

If created, the sovereign wealth fund could place the US alongside numerous other countries, particularly in the Middle East and Asia, that have launched similar funds as a way to make direct investments with government dollars.

The text of the executive order was sparse on details, and simply directed the US treasury and commerce departments to submit a plan for such a fund within 90 days, including recommendations on “funding mechanisms, investment strategies, fund structure and a governance model”.

Typically such funds rely on a country’s budget surplus to make investments, but the US operates at a deficit. Its creation also would likely require approval from congress.

“We’re going to create a lot of wealth for the fund,” Trump told reporters. “And I think it’s about time that this country had a sovereign wealth fund.”

Trump had previously floated such a government investment vehicle as a presidential candidate, saying it could fund “great national endeavours” like infrastructure projects such as highways and airports, manufacturing, and medical research.

Administration officials did not say how the fund would operate or be financed, but Trump has previously said it could be funded by “tariffs and other intelligent things”.

Treasury secretary Scott Bessent told reporters the fund would be set up within the next 12 months.

TikTok

“We’re going to monetise the asset side of the US balance sheet for the American people,” Bessent said. “There’ll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people.”

One approach would be to convert the US International Development Finance Corp (DFC) to function similarly to a sovereign wealth fund, which the Trump administration reportedly considered in recent months, Bloomberg News reported. The DFC is a government agency that currently partners with private parties to finance projects in the developing world.

Trump announced Friday he was nominating Benjamin Black to head that development agency. Black, a managing partner at investment firm Fortinbras Enterprises, is the son of Leon Black, the co-founder of asset management firm Apollo Global Management.

Read: Trump says he is open to Musk buying TikTok US

The Biden administration also was considering establishing such a fund prior to Trump’s election in November, according to The New York Times and the Financial Times.

But precisely how such a fund would be structured, and funded, remained unclear. Several experts said congress would likely need to authorise new funding given the lack of an existing surplus to tap. The order directed officials to review any need for legislation.

Investors said the news came as a surprise.

“Creating a sovereign wealth fund suggests that a country has savings that will go up and can be allocated to this,” said Colin Graham, head of multi-asset strategies at Robeco in London. “The economic rules of thumb don’t add up.”

In another surprise twist, Trump suggested the wealth fund could buy TikTok, whose fate has been up in the air since a law requiring its Chinese owner ByteDance to either sell it on national security grounds or face a ban took effect on 19 January.

Trump, after taking office on 20 January, signed an executive order seeking to delay by 75 days the enforcement of the law.

Trump has said that he was in talks with multiple people over TikTok’s purchase and would likely have a decision on the app’s future in February. The popular app has about 170 million American users.

Read: Rand tumbles as Trump trains his sights on South Africa

“We’re going to be doing something, perhaps with TikTok, and perhaps not,” Trump said. “If we make the right deal, we’ll do it. Otherwise, we won’t … we might put that in the sovereign wealth fund.” — Jarrett Renshaw, Pete Schroeder, Jasper Ward, Tom Hals, Jack Queen and Suzanne McGee, (c) Reuters

Get breaking news from TechCentral on WhatsApp. Sign up here.