The Trump administration has expressed deep concern over Norway’s sovereign wealth fund after it sold its stake in Caterpillar, citing the company’s alleged involvement in human rights violations in the Palestinian territories.
The $2 trillion Norwegian oil fund confirmed last week that it divested from the construction equipment maker after its ethics council claimed Caterpillar’s bulldozers had been used to demolish Palestinian properties.
Washington reacted strongly, with the US State Department describing the claims as “illegitimate” and confirming it had raised the matter directly with Oslo. The response adds pressure on Norway just days before its parliamentary elections.
Republican Senator Lindsey Graham warned of possible tariffs and visa restrictions targeting fund officials. He argued that if the fund would not work with Caterpillar because of Israel, it should also expect limits on its access to the US market.
This is the first time Norway’s fund has divested from a non-Israeli company due to alleged involvement in Israel’s actions. The move has reignited debate at home, with smaller political parties demanding a complete withdrawal from Israel-linked investments and even calling for the resignation of the fund’s chief executive, Nicolai Tangen.
The fund, which typically owns stakes in 1.5% of global listed companies, has already sold almost half of its Israeli holdings. Norwegian officials, however, stress that investment decisions are made independently by the central bank and not by the government.
While Prime Minister Jonas Gahr Støre emphasized the independence of the fund in messages to US lawmakers, Graham maintained that the divestment was “outrageous” and said he would push the administration to act.
The controversy underscores the rising political stakes surrounding the fund’s ethical policies, as Oslo faces both international pressure and strong domestic public opinion critical of Israel’s actions.
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