World trade is set to post its first annual contraction since the financial crisis

• World trade was poised to post its first annual decline since the financial crisis at the end of 2019, according to a closely watched gauge of activity.
• The results offered the latest evidence that a tit-for-tat tariff dispute between the US and China has rippled through broader supply chains.
• Businesses and market watchers don't expect a full recovery anytime soon.
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World trade was poised to post its first annual decline since the financial crisis at the end of 2019, the latest evidence that the effects of a tit-for-tat tariff dispute between the US and China has rippled through broader supply chains.

Trade volumes declined 1.1% from a year earlier in November, according to a closely watched gauge from the Netherlands Bureau for Economic Policy Analysis, 0.6% lower than in October. The sixth consecutive monthly drop put global trade activity on track for its first full-year decline since 2009.

A series of bitter trade standoffs among some of the largest economies have led to steep tariffs on thousands of products over the past two years, raising costs for importers and restricting access to key markets.

A wave of recent economic surveys has painted similarly dismal pictures of global trade. Faced with steeper costs and a high level of uncertainty, businesses have struggled with thinner margins and investment plans. Trade tensions have put particular pressure on the manufacturing industry, which slipped into a recession this year in the US and in Europe.

"A multi-front trade war has weakened the global economy," said David Kelly, the chief global economist at JPMorgan Asset Management.

Recent trade truces the Trump administration announced separately with China and with North American trade partners could put activity back on track in 2020, but businesses and market watchers don't expect a full recovery anytime soon. Exacerbating a broader economic cooldown across the globe, tariffs remain on the vast majority of products that have been targeted in recent years.

"The potential for further trade friction remains and international economic activity remains slow following last year's turmoil," Kelly said.