Marc Chandler

The United States is obsessed with its ever-growing trade deficit. Yet trade is no longer a valid measure of global competitiveness. Today U.S. firms compete in the world marketplace through foreign-affiliate sales instead of exports -- and they do so with unparalleled success. Overblown fears about the burgeoning trade deficit, along with a slowing U.S. economy, could spark protectionist policies in Washington, which could then trigger retaliations around the globe. This outcome -- not the size of the trade deficit -- is the greatest danger.