US slams Norway fund over Caterpillar divestment tied to 'Israel'
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Norway’s $2 trillion oil fund cut Caterpillar over its use in Palestinian home demolitions, drawing US protests and warnings from Senator Lindsey Graham.
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An Israeli military bulldozer destroys Palestinian homes inside the Gaza Strip as seen from southern occupied Palestine, Wednesday, September 3, 2025. (AP)
Donald Trump’s administration has voiced strong concern over Norway’s sovereign wealth fund after it sold its stake in US construction giant Caterpillar, citing the company’s role in “Israel,” the Financial Times reported. Washington confirmed it had lodged a protest with Oslo, dismissing the divestment as based on “illegitimate claims.”
The move comes two decades after American activist Rachel Corrie was killed in Gaza when she was crushed by an Israeli D9 bulldozer.
Today, those same machines are leveling Palestinian homes at relentless speed, cementing Caterpillar’s place at the heart of a global controversy. This is only one chapter in the company’s harrowing record.
A report published in July revealed that as the Israeli occupation wages mass killings in Gaza, its forces are deploying US-made heavy machinery not only to raze buildings but also to crush bodies, a tactic used to conceal the true scale of casualties and block images of the killed from reaching the world.
By Abdallah Sharsharah
— Hala Hanina (@HalaHanina) September 3, 2025
“Hello @Caterpillar, you are helping the Israeli army commit genocide! These images would make great news for your investors… but I don’t think the world will be happy with these pictures published by the Israeli army,+ pic.twitter.com/oZZOQwp8ry
This week, an Israeli contractor embedded with the military brazenly boasted about using a bulldozer to desecrate the body of a Palestinian killed in an Israeli assault, a chilling admission that lays bare the brutality of the genocide.
'Extensive and systematic violations of international humanitarian law'
The $2 trillion fund, the world’s largest, disclosed last week that it had divested from Caterpillar following recommendations from its independent ethics council. The adviser argued that Caterpillar’s bulldozers were being used to “commit extensive and systematic violations of international humanitarian law” through the demolition of Palestinian property.
The US State Department escalated the issue on Wednesday. “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. We are engaging directly with the Norwegian government on this matter,” it said.
The controversy has added to diplomatic pressure on Norway just days before its parliamentary elections. US Senator Lindsey Graham, a close ally of President Trump, has already threatened retaliatory measures. “To those who run Norway’s sovereign wealth fund: if you cannot do business with Caterpillar because Israel uses their products, maybe it’s time you’re made aware that doing business or visiting America is a privilege, not a right,” Graham warned last week.
Caterpillar exit sparks US ire over Norway fund’s 'Israel' stance
The Caterpillar divestment marks the first time the fund has exited a non-Israeli company over links to Israeli actions in the Palestinian territories. The fund, which typically holds about 1.5% of every listed company worldwide, has long been sensitive to US criticism of its ethical exclusions, concerns sharpened by “Israel’s” war on Gaza and tightening control over the West Bank.
According to the Financial Times, some officials in Oslo have privately expressed fears that Washington could invoke anti-boycott laws against Norway in response to further criticism of “Israel.” Last year, Norway formally recognized Palestine as a state and has since faced growing public pressure to distance itself from the Israeli occupation.
The oil fund has become a central issue in Norway’s election campaign, with smaller parties demanding a complete divestment from Israeli holdings and calling for the resignation of CEO Nicolai Tangen. While Tangen has resisted those calls, the fund has reduced nearly half its Israeli exposure in addition to cutting Caterpillar.
Until recently, Norway’s centre-left government had largely avoided Trump’s direct ire, unlike Denmark, which has repeatedly clashed with Washington over US interest in Greenland.
The Financial Times reported that Trump spoke last month with Jens Stoltenberg, Norway’s finance minister and former NATO chief, about a range of topics, including the Nobel Peace Prize. Although the prize is awarded by an independent committee, previous awards, notably the 2010 decision honoring Chinese dissident Liu Xiaobo, have sparked diplomatic reprisals against Oslo.
Norwegian leaders have sought to push back against US criticism. After Graham branded the Caterpillar divestment “beyond offensive,” Prime Minister Jonas Gahr Store texted the senator to emphasize that the sovereign fund operates independently of government. Graham later acknowledged the message but told Bloomberg the decision was so “outrageous” he would encourage the Trump administration to impose visa restrictions on fund officials.
