Economists once had a word for those who thought that states should decide where microchips were made, who owned the ports and which currency would settle the oil trade, and it was a term that was far from complimentary: “mercantilists.” Geoeconomics—the use of markets as instruments of power—was filed alongside industrial policy and capital controls as a practice of governments that eschewed the rules. These assert that capital flows to its most productive use, borders are frictions, and a portfolio is a question of risk and return, not allegiance.

This is now an anachronism to its own practitioners. As America subsidizes semiconductor factories, screens outbound investment and weaponizes the dollar-clearing system, Europe,…