Norway’s sovereign wealth fund dumped Caterpillar shares over ethical concerns tied to Israel, sparking a fierce response from US Senator Lindsey Graham, who warned of tariffs and visa restrictions.
A fresh diplomatic storm erupted after Norway’s $2 trillion sovereign wealth fund — the largest in the world — confirmed it had sold off all shares in Caterpillar, citing the company’s supply of bulldozers used by Israel in Gaza and Judea and Samaria.
The decision followed a recommendation from the fund’s Council on Ethics, a watchdog under Norway’s Ministry of Finance that enforces parliament’s ethical guidelines. The Council accused Caterpillar of breaching standards through its equipment’s role in the conflict zones.
The move triggered outrage in Washington. Senator Lindsey Graham (R-SC), a staunch ally of President Donald Trump and vocal supporter of Israel, blasted the divestment as “beyond offensive.”
“Your decision to punish Caterpillar, an American company, because Israel uses their product is beyond offensive… I urge you to reconsider your shortsighted decision,” Graham posted on X, warning that Norway could face US trade tariffs or visa restrictions.
In an attempt to cool tensions, Prime Minister Jonas Gahr Stoere reached out directly to Graham, with State Secretary Kristoffer Thoner clarifying that the fund’s decisions are independent of the government and made by Norges Bank’s board under a strict framework.
“This is not a political decision,” Thoner emphasized.
The Caterpillar divestment is part of a wider campaign:
- On August 18, the fund revealed it had divested from six companies linked to the Gaza war and Israeli settlement activity (names withheld until shares were sold).
- Just a week earlier, the fund had sold stakes in 11 Israeli firms.
- Over recent years, the fund has blacklisted 11 companies for ties to Israel’s “occupation,” including Paz Oil and Bezeq Telecom.
The controversy comes amid Norway’s September 8 elections, where some parties are pushing for a full boycott of Israeli firms. Though parliament voted down a blanket divestment in June, pressure is mounting as the fund’s actions increasingly align with pro-boycott sentiment.
With the fund’s global influence and its $2 trillion portfolio, the clash over Caterpillar could escalate into a test case for US-Norway relations — and a flashpoint in the broader debate over economic warfare tied to the Gaza conflict.
