America’s share of the global export market is declining, and world trade is at its “worst performance in nearly a decade.”

That’s according to Ian Shepherdson, chief economist at Pantheon Macroeconomics, who in a research note, highlighted the effect of the trade war of global export markets.

He said that China’s economic slowdown and the trade war has hit export markets hard.

“World trade growth has slowed sharply over the past year, thanks both to the trade war with China, which is dampening trade flows around the world as supply chains adjust to the shock, and China’s cyclical slowdown,” said Shepherdson.

In the note, the economist said that world trade volume dropped 1.4% in the year to June — marking it as the lowest level of trade in a decade.

“The downshift since late 2018 is nothing like as bad as the near-20% collapse triggered by the 2007- to-08 financial crisis, but that’s the wrong benchmark,” says Shepherdson.

“World trade ought to grow at least as quickly as world GDP growth — if not faster, in the era of globalization — so the speed of the downshift this year is alarming,” he said.

“The most recent lurch to the downside presumably is due to the trade war, given that China’s PMIs have stabilized,” he added.

For the US, Shepherdson says the visible consequences of this decline are “breathtaking.”

“The bigger picture—the trend in the deficit—usually is driven by the strength of domestic demand, which drives imports, and the growth of world trade, which drives exports,” he wrote. “The relative strength of the dollar can make a difference to the pace of export and import growth, relative to the external/internal demand position, but it rarely is a game-changer. Right now, the stars are aligned to push up the US trade deficit.”

“It [ISM export orders] is not always a reliable short-term indicator of actual exports, but it captures the big picture quite well, and it points to a terrible Q4,” he says, adding that he expects import growth to slow too.

As a result the Pantheon economist does not seem too optimistic for future growth in the year ahead.

“We have to expect net trade to be a drag on GDP growth through the year-end and into 2020.”