Taipei: President Lai Ching-te announced plans for Taiwan to establish a sovereign wealth fund (SWF) during his one-year anniversary speech. The fund aims to manage foreign investments to strengthen Taiwan’s global economic connections.

According to Focus Taiwan, the SWF will serve as a national investment platform to leverage the strengths of Taiwanese businesses, with the government leading the initiative and engaging the private sector. The goal is to build a global presence and connect with major markets, particularly in the AI era. While President Lai did not provide detailed specifics, he emphasized that this proposal is a strategic response to current global economic challenges.

Lai addressed questions about the timing and focus of the SWF, noting that the initiative is part of Taiwan’s international economic strategy. The government plans to introduce legislation for the fund, which will primarily focus on foreign investments and assist local businesses in expanding internationally.

The International Monetary Fund defines sovereign wealth funds as government-owned investment funds established for various macroeconomic purposes, typically funded by foreign exchange assets invested long-term overseas. In Taiwan, the idea has sparked local debate, with the Ministry of Finance advocating for further discussion to reach a consensus.

In his speech, Lai also touched upon the ongoing trade discussions between Taiwan and the United States, particularly concerning tariffs imposed by U.S. President Donald Trump. Despite the challenges, Lai expressed confidence in finding common ground with the U.S. Taiwan is also seeking to strengthen trade relations with other countries, including the United Kingdom, through the Enhanced Trade Partnership and aims to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

According to Taiwan’s Office of Trade Negotiations, Taipei and Washington held their first in-person meeting on tariffs on May 3, following initial talks via videoconference on April 11. President Trump’s announcement of reciprocal tariffs on April 2 included a 32 percent import duty on Taiwanese goods, targeting countries with significant trade surpluses with the U.S. However, a 90-day pause was later announced to allow for negotiations.