President Donald Trump's administration said on Wednesday it was "very troubled" by the divestment by Norway's $2 trillion wealth fund from US 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 West Bank.
Boycott, Divestment, and Sanctions movement
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 US State Department spokesperson said.
"We are engaging directly with the Norwegian government on this matter."
Trump ally and Republican US Senator Lindsey Graham has suggested Washington should impose tariffs and visa revocations in retaliation.