The world’s biggest shipping company just put up a red flag that the trade war is crushing the global economy

AP Moller-Maersk, the world’s biggest shipping company, just gave a stark warning about global trade in its latest financial report, saying that the US-China trade war has impacted growth.

In the report, Maersk said “global container trade grew by around 2% in Q2 2019 compared to Q2 2018,” which was in line with expectations. But it noted that there was a broad-based slowdown in major economies, adding “negative effects from escalating trade restrictions also weighed on trade growth.”

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Maersk is often used as a barometer of global trade sentiment and activity given the bulk of goods worldwide are shipped. It controls about 20% of seaborne consumer goods, which gives it a good perspective on trends affecting trade.

So far, US importers have shifted imports away from China to other countries such as Vietnam, Korea, Thailand, India and Mexico,

Maersk said in its report.

The impact of the newly imposed tariff hike is expected to be significant for the US-China bilateral trade and could in isolation remove up to 0.5% of global container demand in 2019 and 2020, and when US tariffs on additional $300 billion is implemented later in the year, it could result in a reduction of up to 1% in 2020,

Maersk added.

Maersk’s CEO said that the low growth scenario doesn’t look like it will end soon, and that a risk of a recession could hurt demand even more. But that he doesn’t think there will be a recession in the US in 2019 or 2020.

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