Trade among nations is declining sharply around the world, an unusual development even in a recession -- and one that makes it more difficult for countries to pull out of their economic dive.

Combined exports and imports by the U.S., the world's biggest economy, dropped 18 percent in the four months from July to November, to $326 billion from nearly $398 billion, according to Commerce Department figures released Tuesday. Two-thirds of the drop was in imports, which helps explain why so many countries dependent on trade with the U.S. are suffering: Their exports, a key source of growth, are falling as spending by U.S. consumers and companies continues to sour.

Japan, the No. 2 economy and heavily dependent on exports for growth, posted a 27 percent decline in November compared with a year earlier, its Ministry of Finance said Tuesday, the biggest slide it has ever recorded. Its imports also dived by 14 percent, contributing to the pain of exporters elsewhere in turn.

China posted its most severe foreign-trade decline in at least a decade, in government figures for December released Tuesday. Germany had its worst export drop this decade in November, down 11.8 percent from the previous year; the next three biggest European economies had drops nearly as bad, according to a calculation by The Wall Street Journal.

The simultaneous trade losses among the world's big economies intensify pressure on their companies to find new customers, but consumers are cutting their spending virtually everywhere. The U.S., Japan and Europe's 16-country euro zone are already in recession, and the red-hot growth seen in emerging countries in recent years is cooling rapidly, including in China. "We think this will end up being the worst global recession since the Second World War," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Mass.

Don Brasher, founder and owner of Geneva-based Global Trade Information Services, said he expects the downward trend in global trade activity to continue for at least the next six months. In 15 years of running his company, he says, "I've never seen this before."

The downturn in trade is hitting big and small companies hard. Maersk Group, the world's biggest container shipping company, said last month it is laying up eight huge vessels due to a drop in business. Maersk Chief Executive Nils S. Andersen told reporters Tuesday that he doesn't expect a quick turnaround.

In West Babylon, N.Y., Galkin Automated Products Corp. saw exports of its machinery used to make mattresses start to drop abruptly in October. The slowdown then spread to all its markets, including Indonesia, Australia and the Middle East.

"Nobody's immune," says Chief Executive Paul Block. "The fist has just continued to clench itself, and it's happening everywhere." Galkin has shed five of its 30 workers and cut back hours by 15 percent to try to preserve jobs.

While the growth of global trade generally slows during recessions, it doesn't usually contract world-wide; the last time it did was 1982. But in December, the World Bank projected global trade would decline by 2.1 percent this year. That would top the 1.9 percent decline seen in 1975, the biggest since World War II.

The recent trade declines are accentuated by a sharp fall in commodity prices, including a historic slide in the price of oil. Petroleum imports alone drove just over half the total U.S. declines in November from the previous month, falling $13.6 billion while U.S. imports overall fell by $25 billion.

There's a silver lining there for the economy, as the lower prices provide relief to households and businesses. The average price per barrel of imported crude oil dropped sharply to $66.72 in November from $92.02 the previous month and has since fallen further. That will play a key role in lowering the U.S.'s import bill in the months ahead.

Falling trade also is cutting the U.S. trade deficit because imports are falling more than exports -- in November, U.S. imports fell 12 percent from the previous month compared with 5.8 percent for exports. The deficit shrunk to $40.4 billion from $56.7 billion in October; it was the smallest deficit in five years. That in turn helps raise estimates of U.S. fourth-quarter gross domestic product.

But U.S. GDP is still expected to show an annualized drop of about 5 percent for the fourth quarter, the worst in a quarter-century, and the underlying deterioration in global demand is expected hurt growth in 2009.

Aside from oil, U.S. imports also are falling because of lower demand for foreign goods and services. U.S. imports of autos and related parts fell $1.2 billion in November, for instance, while imports of foreign-made consumer goods such as televisions, jewelry and toys dropped by $3.8 billion.

In turn, foreign countries showed a reduced appetite for U.S. goods and services. At Nomacorc LLC, a maker of synthetic wine corks in Zebulon, N.C., Chief Executive Lars von Kantzow says the company's exports are being hurt by two factors. He sees wine consumption in Europe going down in key markets, and his customers -- retailers, distributors and wineries -- are all rushing to cut inventories to free up cash.

In Brussels, Charlie Gillet is seeing a similar trend in his job as a salesman for the 12-employee World Trading Co. It sells cleaning products to 1,200 companies, including factories that make goods to export. "Factories are ordering 30 percent to 50 percent cuts in stocks of cleaning products," he said. "They want to hold half as much in inventory and they want 60 days to pay their bills instead of 45 days."

The General Federation of Belgian Workers, the Belgian socialist workers union, held an emergency meeting Tuesday to discuss the decline in export-based production, says spokesman Daniel Richard. "We're all preparing for huge layoffs in the coming months," he says. Belgian law allows companies to temporarily lay off workers and rehire them later without paying a steep penalty.

The woes of the world's biggest economies are especially worrisome to developing nations, whose cheaper labor and raw materials helped those markets become global production centers and rising prosperity, in turn, cultivated their own domestic demand.

Exports from China in December fell 2.8 percent from a year earlier, extending the 2.2 percent decline in November, China's customs agency said Tuesday. China's imports fell even more sharply, dropping 21.3 percent in December after a 17.9 percent fall in November.

Exports have contributed around 20 percent of China's economic growth since 2005, up from a single-digit share in previous years. That boost from overseas demand helped charge China's five-year run of 10 percent-plus economic growth. It won't be easy to replace that quickly, one reason why China's growth rate is expected to slow sharply this year, to 8 percent or lower.

Those combined strains are on display in Yiwu, a city four hours' drive southwest of Shanghai. It's often called the dime-store capital of the world, thanks to its Yiwu International Commodity Trade City, a 370-acre market with more than 60,000 stores selling everything from socks to glittering costume jewelry.

In good times, Yiwu is overrun with buyers from U.S., Europe and the Middle East snapping up things like zippers and notebooks in bulk. But with new orders from the U.S. and Europe dropping recently, merchants are trying to make up the shortfall by cultivating new markets from Latin America and Russia, as well as domestic Chinese consumers -- with lukewarm results.

One of the center's more ambitious ventures was the opening of a new wing in late 2007 that was intended to lure Chinese consumers with Korean child seats, Californian wines, Japanese ceramics and Italian shoes. A year later, traders in that section report hardly any business at all.

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