(MENAFN) Russia has imposed fresh sanctions on Daimler Truck, a leading German truck manufacturer and crucial supplier to the German military, marking a significant escalation in the ongoing economic standoff between Moscow and the West. This decision was formalized in a government decree released last week.

Daimler Truck, which has held a 15% stake in Russian vehicle giant KamAZ since 2008, was previously involved in a joint venture that produced cab frames for heavy-duty trucks. Despite its deep roots in the Russian market, the company is now the 33rd entity to be added to Russia’s sanctions list since May 2022, as part of Moscow’s retaliatory actions against Western sanctions linked to the ongoing Ukraine conflict.

The new sanctions prohibit Russian individuals and entities from engaging in business with the listed companies, halting current contracts and barring any financial transactions benefiting them. However, exemptions may be granted on a case-by-case basis for specific deals.

Daimler Truck had already suspended operations in Russia in March 2022, following the intensification of the Ukraine war. Although the company initially stopped short of exiting entirely, it ultimately withdrew from the Russian market, selling its local operations. In February 2024, KamAZ CEO Sergey Kogogin confirmed that Daimler had divested its stake and ceased all activities with the company since early 2022.

Once the world’s largest truck maker, Daimler Truck's departure from Russia has created a void, which has largely been filled by Chinese car manufacturers. Despite this, Moscow has consistently condemned Western sanctions as ineffective and unlawful in isolating Russia’s economy.

Daimler Truck’s significance extends beyond commercial ventures, as the company also serves as a key supplier to the German military. Its Mercedes-Benz Special Trucks division provides a wide range of vehicles for military use, including recent orders from the German Bundeswehr for Mercedes-Benz Arocs logistics vehicles, complete with all-wheel drive and military-specific modifications.

The sanctions against Daimler Truck come amid a growing hardline stance by German Chancellor Friedrich Merz against Russia. Since taking office, Merz has pushed for greater military support to Ukraine and advocated for the use of long-range missiles to strike deep into Russian territory, drawing Moscow’s ire. The Kremlin has warned that such actions could ultimately drag Germany into a direct confrontation with Russia.

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