Global imbalances have re-emerged as a central concern in the international economic landscape, with widening current account surpluses and deficits reviving tensions reminiscent of the pre-Global Financial Crisis period. While the scale of today's imbalances remains below the peaks of the 2000s, their rapid growth since 2018 and the renewed concentration of external positions, particularly involving the United States, China, and the European Union, have heightened both financial and political risks. History suggests that such imbalances can culminate in financial instability, and current conditions, characterised as they are by elevated external liabilities, concentrated investor exposures, and signs of market fragility, underscore the potential for abrupt adjustments and global spillovers. At the same time, persistent trade imbalances risk fuelling protectionism and fragmenting the global trading system, as evidenced by escalating trade tensions and a shift toward more unilateral policy stances. This Policy Insight, which is a modified version of Chapter 1 of the joint CEPR and Bruegel 2026 Paris Report, "The New Global Imbalances" (Rey et al, 2026), examines why global imbalances have regained prominence, what drives them in the current context, and how policymakers should respond. Drawing on recent research, it analyses the underlying causes of imbalances across the world's major economic blocs and evaluates the appropriate policy responses, ranging from addressing domestic structural distortions to resisting protectionist pressures. The Insight emphasises that there is no one-size-fits-all solution: the appropriate response depends on the nature and origins of each imbalance. Ultimately, it argues for a balanced and evidence-based approach to mitigating risks while preserving the openness of the global economic system.