What Does the Return of Industrial Policy Mean for the Global Trading System — and for States That Cannot Afford to Play?

For three decades after the Cold War, the expansion of trade, investment, and financial flows between major economies was treated not only as a source of prosperity but as a structural deterrent to conflict. The proposition was intuitive: states with deeply intertwined economies would face prohibitive costs if they chose confrontation. That logic has not been abandoned, but it has been severely qualified. The same interdependencies that were meant to constrain aggression have turned out to be vulnerabilities — pressure points that can be exploited through sanctions, export controls, and the deliberate politicisation of supply chains.

The past decade has seen the most significant restructuring of the global economic order since the 1970s. The United States has moved from championing open markets to deploying industrial policy at scale, restricting technology exports, and pressuring allies to align their economic statecraft. China has accelerated domestic substitution programmes across strategic sectors. The European Union is reaching for the language of strategic autonomy in areas where it was once content to rely on market integration. The cumulative effect is a world in which the architecture of globalisation — built on the assumption that economic efficiency and political stability were complementary — is being deliberately modified by the very states that built it.

This roundtable asks the harder questions that follow. Is managed decoupling achievable without triggering the instability it is meant to prevent? Which states possess the industrial base, the capital, and the political cohesion to absorb the costs — and which do not? And if the era of deep interdependence is genuinely closing, what replaces it: a more resilient international order, or a more fragmented and dangerous one?