Donald Trump proposes creating a US sovereign wealth fund

Former president says his across-the-board tariffs would be used to supply fund

Republican US presidential candidate Donald Trump. AP

Latest updates: Follow our full coverage on the US election

Donald Trump on Thursday proposed the establishment of a US sovereign wealth fund as part of his economic pitch to business executives.

Mr Trump told the Economic Club of New York that he would create a wealth fund to “invest in great national endeavours for the benefit of all of the American people”, after again pledging a mass deportation of undocumented immigrants.

“Why don't we have a wealth fund? Other countries have wealth funds. We have nothing,” he said.

The UAE, Saudi Arabia, China, Singapore and Kuwait are among the nations that have sovereign wealth funds.

The Republican presidential candidate offered little explanation for how the programme would be funded except for his across-the-board tariffs and “other intelligent things”.

Many economists say Mr Trump's proposal – which would put a 10 per cent tariff on all trading partners and a 60 per cent tariff on China – would reignite inflation and stunt economic growth.

The US national debt, now at $35 trillion, increased by $8.4 trillion during his term in office, compared to $4.3 trillion to date under President Joe Biden.

Mr Trump said the sovereign wealth fund would be used to build motorways, airports, airport infrastructure and other projects.

His proposal was part of his broader economic agenda, as he and Vice President Kamala Harris look to strengthen their records before the November election. The Economic Club of New York said it had also invited Ms Harris to deliver remarks and is awaiting a response from her team.

Mr Trump spoke for more than an hour to leading US business executives including Blackrock chief executive Stephen Schwarzmann, former World Bank president David Malpass and hedge fund manager John Paulson.

The former president also pledged to bring down the price Americans pay at the pump to $2 for a gallon of petrol – about $1.10 less than the average price today.

He has previously claimed US energy security has become weaker under Mr Biden, although the country produces more crude oil today than any other nation at any point in time.

Mr Trump, who has pledged to boost production of fossil fuels and repeal parts of Mr Biden's climate law, claimed his plan would cut energy prices in half within 12 months of his taking office again.

“That's why Opec and Arab nations – and we're very honoured to have some of my friends here with us today from that part of the world – but they're working very hard despite being here that I not be your president. They don't like me,” he said.

Trump aligns himself with Musk

Mr Trump also drew himself closer to Elon Musk by publicly backing the Tesla chief executive's recommendation of a "government efficiency commission".

“At the suggestion of Elon Musk … I will create a government efficiency commission tasked with conducting a complete financial and performance audit of the entire federal government and making recommendations for drastic reforms,” he said.

Mr Trump said the commission would “develop an action plan to totally eliminate fraud and improper payments within six months”.

“I will launch a historic campaign to liberate our economy from crippling regulation,” he said.

Mr Musk, a major donor to Mr Trump's campaign, recommended the commission during a conversation with the Republican presidential candidate last month, which was broadcast live on X.

Mr Trump said Mr Musk has agreed to lead the commission.

Posting on X earlier on Thursday, Mr Musk said: “I look forward to serving America if the opportunity arises.”

Mr Trump's remarks come less than a week before his first debate with Ms Harris, and less than 70 days until the election.

Both candidates have been fine-tuning their economic pitches for voters. According to most polls, the economy remains the top issue for voters. Much of the debate around the two candidates' economic policies has focused on taxes.

Ms Harris used a campaign stop in New Hampshire on Wednesday to propose an expansion of tax incentives for small businesses. She said her plan would increase tax incentives from $5,000 to $50,000 for start-ups.

In addition to extending tax cuts that he passed in 2017, Mr Trump said he wants to reduce corporate income tax from 21 per cent to 15 per cent. He said he wants to get rid of taxes on social security benefits.

Ms Harris, meanwhile, said she wants to increase the corporate income tax to 28 per cent.

The Harris campaign issued a memo accusing Mr Trump of wanting to hurt the middle class, arguing his ideas would expand the national debt and shrink economic growth and job creation.

“He wants our economy to serve billionaires and big corporations,” the campaign said in a statement, according to the Associated Press.

According to two analyses from the Wharton School of the University of Pennsylvania, the US deficit would increase under either a Trump or Harris presidency.

But the analyses found that Mr Trump's stated policies would increase the US debt by $5.8 trillion over the next decade, compared to $1.2 trillion under plans proposed by Ms Harris.