US President Donald Trump has taken the first step towards setting up a sovereign wealth fund for the United States and suggested that it could end up buying TikTok.

The president signed an executive order on Monday, to kickstart the process, saying the fund would soon be "one of the biggest".

More than 90 countries have sovereign wealth funds, investing surplus income for the benefit of future generations. However, the US currently runs a budget deficit.

"We're going to create a lot of wealth for the fund," Trump told reporters, without clarifying where the money would come from.

When Trump first floated the idea of a sovereign wealth fund during his election campaign, he suggested it could be funded by "tariffs and other intelligent things".

He has already announced plans to impose tariffs on imports from America's three biggest trading partners - China, Mexico and Canada.

But on Tuesday the levies on Mexico and Canada were paused for 30 days.

US Treasury Secretary Scott Bessent said the fund would be set up within the next 12 months and that the plan was to monetise assets currently owned by the US government "for the American people".

Saudi Arabia and Norway have two of the world's largest sovereign wealth funds, supported by the proceeds of fossil fuel sales. They invest in companies and projects around the world.

President Trump has previously said that a US sovereign wealth fund would finance "great national endeavours" including infrastructure projects such as airports, roads as well as medical research.

After signing the executive order for the fund's creation, he also floated the idea that it could buy up the social media platform TikTok.

The Chinese-owned social media company was briefly taken offline in the US last month, over national security concerns, after the previous administration ordered its owner to sell its US operations or face a ban.

Trump has delayed the ban, promising to find a solution, after TikTok's US users protested at its shutdown.

"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."

However, the president has also recently said that technology giant Microsoft was in discussions to acquire TikTok and that he would like to see a "bidding war" over the sale of the social media app.

Other big names in tech, including Larry Ellison and Elon Musk, have also been floated as possible buyers.