Zinger Key Points
- Trump creates first-ever US Sovereign Wealth Fund to monetize government assets and boost economic value.
- TikTok could be included in the fund, raising potential risks over government control of digital platforms.
- Get the Real Story Behind Every Major Earnings Report
President Donald Trump announced plans for the creation of the first-ever U.S. sovereign wealth fund through an executive order on Monday.
The fund, which aims to “monetize the asset side of the U.S. balance sheet for the American people,” will leverage government-owned assets to generate economic value, Treasury Secretary Scott Bessent said while speaking to the media at the White House.
“We’re going to have a Sovereign Wealth Fund, which we’ve never had,” Trump told reporters in the Oval Office.
Bessent indicated the fund would include a variety of “liquid assets” and strategic holdings within the U.S. economy.
“The extraordinary size and scale of the U.S. government and the business it does with companies should create value for American citizens,” he stated.
President Eyes TikTok Inclusion, No Bitcoin Mention
While details remain limited, Trump indicated the fund could include the Chinese-owned social media platform TikTok.
“For example, TikTok—we’re going to be doing something perhaps with TikTok, and perhaps not. If we make the right deal, we’ll do it, otherwise, we won’t,” Trump said, adding, “I have the right to do that.”
The U.S. government previously mandated ByteDance, TikTok's parent company, to divest its U.S. operations by Jan. 19, 2025, or face a ban.
On his first day in office, Trump issued an executive order delaying the ban by 75 days to explore potential deals.
One option under discussion is a joint venture where the U.S. government would hold a 50% stake in TikTok, allowing the platform to continue operating while addressing national security concerns.
Trump's idea that the U.S. strategic fund could take control of TikTok raises significant concerns about media influence and state-backed control of digital platforms, potentially reshaping the landscape of digital free speech and platform governance.
No mention of digital assets or Bitcoin BTC/USD was made in connection with the sovereign wealth fund, though they were not explicitly ruled out. The largest cryptocurrency rose to $100,000, up by 3% as of 2:30 p.m. ET.
Joseph Brusuelas, chief economist at RSM US LLP, voiced skepticism about the initiative, calling it "problematic at best” and indicating that fund's structure could invite “crony capitalism and corruption.”
His concerns stem from the lack of clarity on where the money will come from and how it will be allocated, particularly if tariff revenues are involved.
Brusuelas also raised doubts about the fund's objectives, asking what specific economic goals it aims to achieve and on what evidence those decisions will be based.
US-Mexico Tariff Talks Continue
Trump also addressed ongoing tariff negotiations with Mexico, following early morning confirmations that a 25% tariff had been temporarily placed on hold.
“We haven’t agreed on tariffs yet, and maybe we will, maybe we won’t,” he stated.
Trump stressed border security concerns, particularly regarding fentanyl trafficking and illegal immigration.
“We’ve had a great talk with Mexico. We’ve had good relations, but we have to stop fentanyl from coming in,” he said.
According to Trump, Mexico has agreed to deploy 10,000 soldiers permanently to the border. “They have a big incentive to do so,” he added, without specifying further details.
The iShares MSCI Mexico ETF EWW slightly trimmed its session rally to 2.3%. The Mexican peso held gains, up 1%.
US-Canada Trade Relations Under Scrutiny
Turning to trade relations with Canada, Trump criticized the country's business practices, claiming that U.S. banks are restricted from operating in Canada and that Canadian policies are unfair to American agricultural and automotive exports.
“We’re not treated well by Canada, and we have to be treated well,” Trump said. “They don’t take our agricultural product for the most part. They don’t take our cars. We take theirs.”
Trump hinted at continued negotiations with Canadian Prime Minister Justin Trudeau, with another call scheduled for later in the day.
Trump also reiterated his idea that Canada should become the 51st U.S. state, an outcome that would eliminate trade barriers.
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