Trump targets Norway’s $2tn treasure: The high-stakes squeeze on the Norges Bank

Traditional Norwegian prosperity, built upon the Government Pension Fund Global (GPFG), the world’s largest sovereign wealth fund, has suddenly become the center of international concern. Established in 1990 to invest the surplus revenues of the Norwegian petroleum sector, the fund currently holds assets exceeding $1.9 trillion. With a population of approximately 5.5 million, this wealth equates to roughly $364,000 per citizen.

Managed by Norges Bank Investment Management (NBIM), the fund's profits in the first half of 2025 alone reached approximately $68.4 billion. For decades, the country has been renowned for its high standard of living, robust social welfare, and quality public services. The Norwegian fund covers about a quarter of the national budget and continues to grow at an annual rate of 6.6%. However, its international standing, bolstered by the Nobel Peace Prize and its role in diplomacy, is now being tested. Donald Trump has threatened tariffs and questioned the sovereign character of the fund. In a letter to Prime Minister Jonas Gahr Støre, he complained that Norway failed to award him the Peace Prize for "stopping more than eight wars" and announced tariffs of 10% and 25% on European and Norwegian products effective February 1, prior to the deal for the US purchase of Greenland.

The role of capital

This policy highlights the fragility of a small but wealthy nation when facing major powers. The reaction in Norway was immediate, as the country's independence and ethical credibility, the foundations of its international influence, face a crisis. Former ethics advisor Cecilia Hellstveit claims the fund’s independence is being undermined, stating that trust built over 20 years collapsed in a single day. Analyst Varg Folkman warns that in a world where powerful nations use economic tools and political pressure, small countries like Norway have limited capacity for resistance. The shift toward "Trumpism" appears to be influencing other regions, including Europe, while the fund's dominant investments in the US leave it particularly vulnerable to political and economic threats. Despite this, the fund remains critical for the long-term social protection and prosperity of the Norwegian people. The current crisis underscores how fragile independence can be for even a respected nation when confronted with global hardball politics.

Trump’s strategic pivot

Trump’s shift in international diplomacy signals a change in status for other small, wealthy states that relied on neutrality and moral authority to offset a lack of hard power. Norway, which lacks the trade protection mechanisms of the EU and is increasingly subject to US economic pressure, has discovered that its traditional independence is tied to new vulnerabilities—from market access to the security of its sovereign wealth fund. The long-standing belief that rules and reputation could compensate for a lack of military force is being tested as the world moves away from these norms. Varg Folkman, a trade policy analyst at the EPC in Brussels, summarizes: "In the world we are entering, it will be very dangerous for a small country like Norway to occupy a large space on the international stage. If any large country uses economic tools to coerce us, we will effectively be unable to do anything."

'Trumpism' in economics

The economic form of "Trumpism", a contagious style of transactional politics, has already reached Brussels. Last November, quotas were imposed on the export of Norwegian ferroalloys, a move unseen for 30 years. While the direct economic impact was limited, the precedent is significant, as two-thirds of Norwegian exports are destined for the EU.

Norway’s economic future

For ordinary Norwegians, the sovereign fund remains the cornerstone of their future. "This is the economic future of Norway," says Folkman. "One can only underestimate how important it is." Much of the fund’s capital is held abroad, including within US jurisdiction through American financial institutions, a system common to central banks worldwide. Historically, Norway has depended on a rules-based system that respects investor rights and the free movement of capital, trusting that sovereign assets are safe.

Is the system still working?

This is the looming question. Although Brussels failed in December to agree on a plan to extract up to €210 billion from frozen Russian assets to fund Ukraine, the debate is far from over. Meanwhile, Washington has already imposed restrictions on capital outflows. Officials have avoided answering which portion of the Norwegian fund falls under US jurisdiction, and could thus be frozen, if the seizure of Russian assets sets a permanent precedent. It is obvious who these answers now depend on. Last autumn, the fund faced internal anger over investments linked to Tel Aviv. Washington promptly signaled its stance by pressuring companies like Caterpillar. Norwegians are particularly disturbed that their government is suspending the fund's independent ethics council, reportedly under pressure from the US.

Norway brought to its knees

Now, a prosperous and proud Norway, accustomed to its moral authority, will be forced to adapt to a world that reacts only to power. The recent Davos forum made it clear that for Oslo and other capitals, the luxury of choice is evaporating. It is difficult to overstate the seismic shift at the World Economic Forum, where Canadian Prime Minister Mark Carney delivered a historic critique of the US under Trump. He described the old, American-led rules-based order as a "pleasant illusion" that no longer functions. This provides a clear picture of the "New World Order according to Trump," where AI and massive wealth concentration favor a new generation of billionaires. But that is not Oslo's immediate headache. They are currently preoccupied with Trump’s recent post on Truth Social: "Greenland is essential for national and global security. There is no going back—everyone agrees!" Does anyone dare to object?

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