US President Donald Trump’s administration said Wednesday it was “very troubled” by the divestment by Norway’s $2 trillion wealth fund from US construction equipment group Caterpillar, adding that Washington is directly engaging with the Norwegian government on the issue.
Norway’s $2 trillion wealth fund, the world’s largest and operated by Norway’s central bank, said last week it had divested from Caterpillar on ethics grounds over the use of the company’s products by Israeli authorities in Gaza and the West Bank.
The fund’s ethics watchdog said that in its assessment, Caterpillar’s products such as bulldozers it manufactured were being used by Israeli authorities “to commit extensive and systematic violations of international humanitarian law” such as the “widespread unlawful destruction of Palestinian property.”
The fund said Caterpillar has “not implemented any measures to prevent such use.” Caterpillar has not responded to requests for comment on the wealth fund’s move.
“We are very troubled by the Norwegian sovereign wealth fund’s decision, which appears to be based on illegitimate claims against Caterpillar and the Israeli government,” a US State Department spokesperson said.
“We are engaging directly with the Norwegian government on this matter.”
Trump ally and Republican US Senator Lindsey Graham has suggested Washington should impose tariffs and visa revocations in retaliation.
The Norwegian fund, built from vast oil and gas revenues, is invested in some 8,400 companies, owning 1.5 percent of all listed stocks globally.
Some commentators in the Nordic country have asked whether, given the uncertainties about economic policies under Trump, there could be a risk to the fund’s US assets, such as asset seizure or a forced debt swap.
Asked in April this year what he made of such scenarios, the fund’s CEO Nicolai Tangen said he did not see a credible risk of asset seizure.
The Norwegian divestment from Caterpillar came almost two years into Israel’s campaign against Hamas in Gaza, which began when the terror group invaded Israel on October 7, 2023, killing some 1,200 people and taking 251 hostages.
Satellite images have shown that vast swaths of urban area in the Gaza Strip have been flattened by Israeli forces.
Israel also uses bulldozers in the West Bank, where, as a matter of policy, it destroys the houses of Palestinians who have carried out terror attacks, as well as structures built without permits.
Recent counter-terror operations in the West Bank have seen Israeli forces destroy hundreds of structures in dense urban areas that have seen frequent clashes with the army over the years. According to the military, those demolitions were carried out following extensive discussions and careful review, and limited to the smallest number possible.