By: Fern Sidman

The political battle over the global Boycott, Divestment, and Sanctions (BDS) movement has entered a new and potentially explosive phase, as Sen. Dave McCormick (R-Pa.) called on the Trump administration to punish Norway for its sovereign wealth fund’s decision to divest from Caterpillar. The move, justified by Norway’s ethics council on the grounds of Israel’s use of Caterpillar bulldozers in Gaza and in Judea and Samaria, has drawn condemnation from American lawmakers who see it as a politically driven attack on a U.S. industrial icon — and, by extension, on America’s closest Middle East ally.

According to a report that appeared on Friday in The New York Post, McCormick’s outrage has been brewing since learning that Norges Bank Investment Management (NBIM), which manages Norway’s $1.6 trillion sovereign wealth fund, voted this spring to drop Caterpillar stock from its portfolio. The senator has responded with an unusually aggressive set of proposals: tariffs on Norwegian goods, sanctions against the fund, blocking access to U.S. financial markets, and even visa restrictions for officials connected to the divestment decision.

McCormick’s demands were spelled out in a blunt letter addressed to Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer. The Pennsylvania Republican, a former chief executive of Bridgewater Associates, minced no words in his characterization of Oslo’s actions.

“As the Trump administration continues to take bold action to rebalance global trade, I urge you to also address the disturbing politicization of sovereign wealth fund investment decisions against American companies,” McCormick wrote, as reported by The New York Post. He accused the Norwegian government of nothing less than “economic warfare directed by a foreign government against the U.S. economy.”

The senator stressed that the issue was not limited to Caterpillar, but part of a broader campaign targeting American energy, defense, and infrastructure firms under the guise of “ethical investment.” For McCormick, these divestments represent a disturbing politicization of finance that undermines both U.S. economic security and Israel’s legitimacy.

Caterpillar, based in Illinois, has been a frequent target of the BDS movement for decades. Its bulldozers have been used by the Israel Defense Forces in military operations, including demolitions of Hamas tunnel networks and infrastructure in Gaza. Activists have repeatedly accused the company of complicity in human rights violations, while defenders point out that Caterpillar sells its equipment to the U.S. government, which then transfers some machines to Israel through military aid programs.

As The New York Post report noted, Caterpillar has weathered sustained criticism from activist groups without significant impact on its global business. But the intervention of one of the world’s largest institutional investors — NBIM controls nearly $1 trillion in U.S. assets alone — signals a new level of pressure.

Norges Bank’s ethics council defended its decision on narrowly defined grounds, claiming Caterpillar’s bulldozers were being used in ways that raised “serious ethical concerns.” Prime Minister Jonas Gahr Støre attempted to reassure McCormick in a recent meeting, insisting the divestment was “not political” but aligned with the fund’s mandate to consider human rights implications.

McCormick, however, remains unconvinced. In his letter, he acknowledged the scale of Norway’s U.S. investments but dismissed Støre’s assurances. “I respectfully disagree,” he wrote. “While I recognize the value of Norges’ investments of nearly $1 trillion of U.S. assets, I have significant concerns that these decisions are entirely political and are driven by an agenda that has consistently targeted American companies and is explicitly anti-Israel.”

The senator’s alarm goes beyond Caterpillar. He argued that Norway’s sovereign wealth fund has repeatedly singled out American firms in sectors from fossil fuels to defense, while maintaining business ties with authoritarian states such as China, Qatar, and Turkey.

McCormick’s spokesperson told The New York Post that the senator viewed the Caterpillar divestment as “a prime example” of politicized economic warfare. “He had a constructive conversation with the Norwegian prime minister, but came away very concerned that this is a prime example of this type of troubling behavior,” the spokesperson said.

McCormick has confronted Norwegian leaders directly, both in Oslo and in Washington. He has also sent a separate letter to Norway’s ambassador, warning that he remains “extremely concerned” about what he called “politically driven divestment.”

In his communication with the Trump administration, McCormick urged officials to “put all options on the table.” That list includes tariffs on Norwegian seafood, energy exports, and manufactured goods; blocking NBIM’s access to U.S. financial markets; and visa sanctions targeting Norwegian officials involved in the decision.

Sen. Lindsey Graham (R-S.C.), a close ally of McCormick, has already floated similar measures, describing Norway’s actions as “an attack on America’s closest Middle East ally.” According to the information provided in The New York Post report, Graham warned that Washington must respond forcefully to deter other governments from weaponizing their sovereign wealth funds against Israel and U.S. companies.

NBIM’s influence cannot be overstated. With over $1.6 trillion in assets under management, it is the largest sovereign wealth fund in the world. Its decisions reverberate throughout global capital markets, often setting precedents that institutional investors and other sovereign funds follow.

Richard Goldberg, a senior advisor at the Foundation for Defense of Democracies and a former White House official, told Jewish Insider — in remarks cited in The New York Post report — that the fund’s clout makes its divestments especially dangerous. “Norges is such a large player … it moves capital markets with its decisions,” Goldberg said. “It causes other sovereign wealth funds, pension funds to follow. It causes institutional investors to follow. It really does set trends in investment and an inversion of capital can have impacts.”

Goldberg added that Norway’s upcoming elections could intensify the pressure, with left-wing parties promising to expand the blacklist to more companies tied to Israel. “The danger of weaponized sovereign wealth funds … is an ongoing and growing issue,” he warned.

McCormick’s involvement is particularly notable given his past role as chief executive of Bridgewater Associates, the world’s largest hedge fund. Bridgewater manages slices of NBIM’s massive portfolio, and its chief investment officer, Greg Jensen, even spoke at NBIM’s 2024 investment conference.

Yet McCormick has not allowed those ties to temper his criticism. According to the information contained in The New York Post report, he confronted Norwegian leaders directly last month in Oslo, pressing them to reverse their decision on Caterpillar. That he is now calling for punitive trade measures against a country with which his former firm has deep financial ties underscores the intensity of his conviction.

Caterpillar’s entanglement in the Israeli-Palestinian conflict is not new. For decades, activists have argued that its bulldozers facilitate Israeli military operations in disputed territories. The company, however, has consistently maintained that it does not sell directly to Israel for such purposes; instead, the U.S. government purchases equipment that is later transferred under military aid agreements.

Nevertheless, the BDS movement has long championed divestment from Caterpillar as a symbolic victory. By targeting one of America’s best-known industrial brands, activists aim to stigmatize companies that do business with Israel. The New York Post report noted that the latest move by NBIM marks a significant escalation, effectively embedding BDS logic into the investment policies of a democratic government.

The crux of the debate is whether NBIM’s divestment constitutes legitimate ethical investing or politicized economic warfare. Norwegian officials insist the decision falls squarely within the fund’s mandate to avoid companies linked to human rights abuses. Critics, however, argue that the selective targeting of American firms, while ignoring far worse abuses by authoritarian states, reveals the true motive.

As McCormick put it in his letter: “These decisions are entirely political … and are explicitly anti-Israel.”

The Commerce Department and the Office of the U.S. Trade Representative have yet to respond to McCormick’s demands. According to the report in The New York Post, the Trump administration has not indicated whether tariffs, sanctions, or other punitive measures are under consideration.

In the meantime, lawmakers such as McCormick and Graham are escalating their rhetoric, framing the issue as not merely an affront to Israel but as a direct assault on U.S. economic sovereignty.

Should Washington adopt the retaliatory measures McCormick proposes, U.S.-Norway relations could face significant strain. Norway is a NATO ally and a partner in energy security and Arctic defense. Yet its sovereign wealth fund’s outsized role in global finance gives it leverage that few allies possess.

McCormick has made clear that, in his view, the alliance cannot come at the expense of tolerating what he sees as discriminatory financial practices. As he told The New York Post, “The administration should take action when sovereign wealth funds engage in economic warfare that is driven by political pressure which is anti-American and anti-Israel.”

The controversy over Caterpillar is emblematic of a larger struggle over the future of sovereign wealth funds and their role in geopolitics. If NBIM’s divestment sets a precedent, other funds — from the Gulf states to East Asia — may feel emboldened to pursue politically motivated investment strategies.

As Goldberg warned, ignoring the trend means “literally allowing supposed democratic allies for whom we provide a blanket of freedom the ability to conduct economic warfare against America and American interests.”

The storm surrounding Norway’s sovereign wealth fund and its divestment from Caterpillar has become a test case for how the United States will respond to what lawmakers see as politicized attacks on American companies and Israel. For Sen. Dave McCormick, the stakes are both moral and strategic. He has framed the issue as part of a broader campaign to defend U.S. economic sovereignty, protect Israel, and prevent sovereign wealth funds from weaponizing their financial power against American interests.

As The New York Post report emphasized, the outcome of this dispute could shape not only U.S.-Norway relations but also the global rules of engagement for sovereign wealth funds. If McCormick’s call for tariffs, sanctions, and other punitive measures gains traction, it could mark the beginning of a new era in which the United States pushes back aggressively against financial institutions that allow political agendas to dictate investment choices.

For now, the Trump administration’s response remains uncertain. But what is clear is that the Caterpillar divestment has transformed an industrial icon into the latest flashpoint in the geopolitical battle over Israel, finance, and America’s economic future.