["The World Economy, EarlyView. ", "\nABSTRACT\nIn the prevailing analyses of the crisis of the so‐called American‐led world ‘order’, one topic has been quite neglected: the impact of price competitiveness on the U.S. current account and the related International Investment Position. Despite the relevance of valuation changes, we argue that current account dynamics remain relevant to U.S. International Investment Position, with the real exchange rate influencing both flows and stocks. Drawing upon and refining Milesi‐Ferretti's framework, we explicitly incorporate the real effective exchange rate into the analysis, in order to show that a decline in price competitiveness could be one of the factors underlying the deterioration of the U.S. external accounts. This link could be one of the neglected factors behind the protectionist turn of the United States and the related crisis of the American‐led ‘order’.\n"]