By Kanishka Singh
WASHINGTON (Reuters) -President Donald Trump's administration said on Wednesday it was "very troubled" by the divestment by Norway's $2 trillion wealth fund from U.S. construction equipment group Caterpillar, adding Washington was 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 Israeli-occupied 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 U.S. State Department spokesperson said.
"We are engaging directly with the Norwegian government on this matter."
Trump ally and Republican U.S. Senator Lindsey Graham has suggested Washington should impose tariffs and visa revocations in retaliation.
Firms have faced protests over ties with Israel as the humanitarian crisis in Gaza from Israel's military assault has mounted, and images of starving Palestinians, including children, have sparked global outrage.
U.S. ally Israel's post-October 7, 2023, assault on Gaza has killed tens of thousands of people, internally displaced Gaza's entire population and prompted accusations of genocide and war crimes at international courts and from several rights groups. Israel denies the accusations.
The latest bloodshed in the decades-old Israeli-Palestinian conflict was triggered in October 2023 when Hamas militants attacked Israel, killing 1,200 people and taking about 250 hostages, Israeli tallies show.
(Reporting by Kanishka Singh in Washington; Editing by Jamie Freed)
