Today’s global imbalances, starting with China’s massive trade surplus, are not simply the result of poor macroeconomic coordination. Rather, they reflect strategic behaviour and a departure from the bias towards openness on which the postwar trade order was built. China owes its spectacular success in electric vehicles, batteries and solar panels not to some pre-existing comparative advantage, but to a cumulative interaction of scale, learning, industrial policy, and global market penetration. The liberal assumption that all countries seek to maximize consumer welfare within a common trade policy framework was too simple. Global imbalances reflect deliberate strategies that use trade surpluses as instruments of industrial policy.