On August 28, 2025, the simmering tensions between the United States and Norway took a sharp turn as Senator Lindsey Graham (R-SC) publicly floated the possibility of imposing punitive tariffs and visa restrictions on Norway. The move came in direct response to a decision by Norges Bank Investment Management—the Norwegian sovereign wealth fund and the largest of its kind in the world—to divest from the American construction equipment manufacturer Caterpillar. The fund’s action was prompted by concerns over Caterpillar’s role in Israeli military operations, specifically the use of its bulldozers in what the fund’s ethics council described as “widespread unlawful destruction of Palestinian property” in Gaza and the West Bank.
The Norwegian fund’s announcement followed an ethics review, part of a broader initiative to ensure its investments do not contribute to violations of international law. According to the council’s findings, “There is no doubt that Caterpillar’s products are being used to commit extensive and systematic violations of international humanitarian law.” The Boycott, Divestment, and Sanctions (BDS) movement, which has long targeted Caterpillar, quickly pointed to the decision as a victory for its campaign to hold corporations accountable for their involvement in the Israeli-Palestinian conflict.
Senator Graham, a vocal supporter of Israel, wasted no time in responding. On August 27, 2025, he took to social media to express his outrage, warning, “Your BS decision will not go unanswered.” The following day, he sharpened his rhetoric, suggesting that if Norway’s sovereign wealth fund could not do business with Caterpillar because of Israel’s use of its equipment, then perhaps “doing business or visiting America is a privilege, not a right.” Graham went on to propose that the U.S. consider “putting tariffs on countries who refuse to do business with great American companies” or even denying visas to individuals running organizations that, in his view, “attempt to punish American companies for geopolitical differences.”
“I would urge you to reconsider your shortsighted decision,” Graham declared, making it clear that the Norwegian fund’s move was, in his eyes, “beyond offensive.” He added, “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.”
Caterpillar, a global giant in construction machinery, has frequently found itself at the center of BDS campaigns. Activists and human rights groups have long criticized the company for supplying bulldozers and other equipment used by Israeli authorities in the demolition of Palestinian homes and infrastructure. The Norwegian fund’s ethics council echoed these concerns in its review, stating that “bulldozers manufactured by Caterpillar are being used by Israeli authorities in the widespread unlawful destruction of Palestinian property.”
The Norwegian sovereign wealth fund’s decision is part of a broader trend among institutional investors to scrutinize the social and ethical implications of their holdings. In recent years, the fund has divested from a range of companies over issues such as environmental harm, human rights abuses, and violations of international law. The move to exclude Caterpillar, however, has struck a particularly sensitive nerve in Washington, where support for Israel remains a bipartisan cornerstone of foreign policy.
Senator Graham’s response fits a pattern of staunch defense of Israel and American companies associated with it. In June 2025, Graham articulated his foreign policy stance by stating, “God blesses those who bless Israel.” His unwavering support has not gone unnoticed; according to reporting, Graham has received substantial backing from pro-Israel lobbying groups, totaling around $1 million over his political career.
This is not the first time Graham has threatened punitive measures against countries taking actions he perceives as hostile to U.S. interests or Israel. In November 2024, following the International Criminal Court’s (ICC) issuance of arrest warrants for Israeli Prime Minister Benjamin Netanyahu on charges of war crimes and crimes against humanity, Graham warned that any country cooperating with the ICC would face severe consequences. “If you help the ICC, we’re going to crush the economy,” he said at the time, adding, “Because we’re next. Why can’t they go after Trump, or any other American president, under this theory?”
The current standoff with Norway raises broader questions about the intersection of international law, corporate accountability, and geopolitical alliances. The Norwegian fund’s decision was not taken lightly; its ethics council’s investigation concluded that Caterpillar’s products were directly implicated in activities violating international humanitarian law. The council’s statement left little room for ambiguity: “There is no doubt that Caterpillar’s products are being used to commit extensive and systematic violations of international humanitarian law.”
For critics of Israel’s military policies and their corporate enablers, the Norwegian fund’s move represents a principled stand in favor of human rights and international norms. Supporters of the BDS movement argue that such divestments are necessary to pressure companies and governments to change their behavior. On the other hand, Graham and like-minded lawmakers see these actions as unfairly targeting American businesses and undermining longstanding alliances. They argue that punitive measures against U.S. companies for their dealings with Israel amount to “geopolitical differences” that should not be settled through economic pressure.
The prospect of tariffs or visa restrictions against Norway marks a significant escalation in the rhetoric surrounding BDS-related divestments. While the U.S. has previously criticized European countries for taking similar steps, Graham’s call for concrete retaliatory measures signals a willingness to use America’s economic and diplomatic leverage to defend its companies—and, by extension, its allies.
The Norwegian government and Norges Bank Investment Management have yet to respond publicly to Graham’s threats. However, the episode underscores the growing challenges faced by global investors navigating the complex web of ethical investing, international law, and political pressure. As more funds and institutions weigh the risks and rewards of socially responsible investing, clashes like the one between Norway and the U.S. may become increasingly common.
For now, the standoff remains unresolved, with both sides holding firm to their principles. Graham’s warning that “doing business or visiting America is a privilege, not a right” has set the stage for a potential diplomatic spat, one that could have far-reaching implications for U.S.-European relations, corporate accountability, and the future of ethical investment on the world stage.
As the dust settles, all eyes will be on whether rhetoric gives way to action—and what that might mean for the global business community moving forward.