U.S. President Donald Trump reacts as he and the President of Poland Karol Nawrocki (not pictured) meet in the Oval Office at the White House in Washington, D.C., U.S., September 3, 2025.
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The U.S. administration struck out at Norway’s $2 trillion wealth fund, saying it was “very troubled” by the recent exit from American firm Caterpillar.
In recent weeks, the Norwegian sovereign wealth fund — the largest of its kind in the world — wound down its investments in Israel and announced plans to sell its holding of American machinery manufacturer Caterpillar, amid concerns over links to the conflict in the Gaza Strip.
“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 in a Thursday email. “We are engaging directly with the Norwegian government on this matter.”
The State Department first spoke to the Financial Times about the fund’s strategy on Wednesday.
Wealth fund ‘not a topic of discussion’ at talks
In an emailed statement on Thursday, Norway’s Finance Minister Jens Stoltenberg stressed that the government was not involved in deciding which companies were included in the fund’s portfolio.
More broadly, decisions about the fund were divided between the country’s ministry of finance, its central bank and the fund’s own ethics council, he added.
“The government is not involved in assessing individual companies,” he said. “The decision to exclude companies is an independent decision made by the Executive Board of Norges Bank, in accordance with the established framework. It is not a political decision.”
Stoltenberg added that he had been part of a Norwegian delegation involved in talks with Trump’s economic adviser Kevin Hassett on Tuesday.
“We discussed trade and tariffs, economic sanctions against Russia and support for Ukraine,” he said. “The pension fund was not a topic of discussion.”
Last week, Norges Bank Investment Management (NBIM) — which manages the fund on behalf of the Norwegian population — said it would exit its stake in U.S. machinery maker Caterpillar and five Israeli banks, citing “unacceptable risk that the companies contribute to serious violations of the rights of individuals in situations of war and conflict.”
At the end of last year, the fund held a 1.2% stake in New-York listed caterpillar.
However, the fund’s ethics council had recommended cashing out of that holding, with NBIM saying at the time that management believed Caterpillar’s bulldozers were “being used by Israeli authorities in the widespread unlawful destruction of Palestinian property.”
The State Department’s comments this week are not the first time U.S. officials have hit out at NBIM’s investment decisions.
In a series of posts on the X social media platform last week, Republican Senator and Trump ally Lindsey Graham labeled the Norwegian wealth fund’s portfolio shuffle as “shortsighted.”
“To Norway’s sovereign wealth fund… Your decision to punish Caterpillar, an American company, because Israel uses their product is beyond offensive,” he wrote.
“Maybe it’s time to put tariffs on countries who refuse to do business with great American companies. Or maybe we shouldn’t give visas to individuals who run organizations that attempt to punish American companies for geopolitical differences.”
The Norwegian fund’s divestment from Caterpillar and the Israeli banks came shortly after NBIM said it would sell all its investments in Israeli companies that aren’t in its equity benchmark index “as soon as possible.” NBIM also announced its intention to terminate contracts with external asset managers in Israel.
NBIM’s deputy CEO Trond Grande told CNBC after the initial announcement that the fund’s holdings of Israeli companies had come under increased scrutiny over the summer, as the conflict in the West Bank intensified.
“Due to the conflict and due to opinion here in Norway, I should say there’s a lot of scrutiny around specifically our holdings in Israeli companies,” he said.
“What we’re doing now is really not down-weighing, I wouldn’t put it like that, but we are trying to simplify our portfolio in Israeli equities, because we have ethical guidelines.”
Norway’s sovereign wealth fund, which has a current value of 20 trillion Norwegian kroner ($1.98 trillion), was invested in 61 Israeli equities at the end of June.
It now holds just six Israeli stocks, according to its website.
— CNBC’s Jenni Reid contributed to this article.
