The Trump administration expressed strong opposition on Wednesday to Norway’s $2 trillion sovereign wealth fund divesting from Caterpillar Inc. (NYSE:CAT), citing “illegitimate claims” against the construction equipment manufacturer regarding Israeli operations in Gaza.
U.S. Engages Norway Directly Over Ethics-Based CAT Divestment
The Government Pension Fund Global, operated by Norway’s central bank and the world’s largest sovereign wealth fund, announced its divestment from Caterpillar last week on ethical grounds, Reuters reported.
The fund’s ethics watchdog determined CAT’s bulldozers were being used by Israeli authorities for “extensive and systematic violations of international humanitarian law” in Gaza and the West Bank.
State Department Issues Direct Challenge
“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 U.S. State Department spokesperson said, according to the report. “We are engaging directly with the Norwegian government on this matter.”
The ethics council specifically cited “widespread unlawful destruction of Palestinian property” using Caterpillar equipment, noting the company “has not implemented any measures to prevent such use.”
Republican Senator Proposes Retaliatory Measures
Trump ally Sen. Lindsey Graham (R-S.C.) suggested Washington impose tariffs and visa revocations in retaliation against Norway. The proposal comes as Caterpillar faces mounting pressure over its equipment’s use in the ongoing Gaza conflict.
CAT shares have declined amid broader market volatility, with the company warning of $500-600 million in tariff impacts for the third quarter of 2025. The equipment manufacturer expects total tariff-related costs of $1.5-1.8 billion for the full year.
Broader Context of Corporate Gaza Backlash
The divestment reflects growing corporate scrutiny over Israel ties as the humanitarian crisis escalates. Israel’s military operations, launched after Hamas’s October 7, 2023, attack, have resulted in tens of thousands of Palestinian casualties according to international tallies.
Multiple technology companies, including Microsoft Corp. (NASDAQ:MSFT), face similar protests over alleged support for Israeli military operations.
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