The reality is that there is a trade-off between gains from trade and economic security. The same mechanisms that are the classic foundations of the gains from trade—economies of scale and specialisation—also generate economic dependence. The domestic alternatives that countries did not build up are poor substitutes for globally dominant inputs, such as Chinese manufacturing or US financial services and technology. This lack of alternatives leaves countries exposed to coercion. As the global economy increasingly relies on goods and services that have strategic complementarities and economies of scale, these mechanisms are likely to increase in importance. This applies to payment systems, but also to information technology and artificial intelligence. As geoeconomic power has risen to the forefront of international relations, hegemons want to hyperglobalise the system to increase everyone else’s dependence on what they control, while countries that are heavily dependent on hegemons have begun pursuing anti-coercion policies to reduce their vulnerability to pressure. The Chinese alternative financial architecture is one example; another is the European Commission’s European Economic Security Strategy,........

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