Pompeo’s rhetoric, and that of US national security adviser Robert O’Brien, Attorney General William Barr and FBI Director Christopher Wray, recall the language used against the Soviet Union in the 1950s. They call for ending engagement with China, pushing back ‘its fledgling maritime empire’ and, remarkably, inciting the Chinese people to overthrow their government. They detail with justification the dangers posed by the Chinese Communist Party under Xi Jinping: the suppression of Chinese dissent, the imprisonment of Uighur Muslims, the militarisation of the South China Sea, exploited trade arrangements, industrial espionage, and security controls in Hong Kong. The latest development in the pile-on is the US closure of China’s consulate in Houston, with claims it hosted a spy ring, which has been reciprocated by the Chinese closure of the US consulate in Chengdu.

But Pompeo and President Donald Trump are ratcheting up tensions with China dramatically. Calling for global system strengthening is one thing; calling for regime change in China declares an altogether different level of hostility.

Whether there is a credible plan to back up the threats is far less clear. It would not seem wise for America’s top diplomat to existentially threaten a country that holds US$1 trillion of American debt and is the prime supplier of many of its consumer and intermediate technology goods, including medical supplies in a time of global pandemic. It will be extremely costly to cut China off from the United States and the international economy altogether, including in electronics at the battlefront of the new Cold War. Unravelling economic ties will unleash a sharper expression of power and do away with the constraints that help maintain peace and security not only between China and the United States.

Countries around the world, but particularly US allies in Asia and the Pacific, now confront crunch time in the face of these radical changes in US foreign and international economic policies.

Canada, enmeshed by geography in America’s fortunes good or bad, is exquisitely caught in the growing crossfire of US–China tensions. ‘The engagement approach that has been the bedrock of Canadian policy toward China for 50 years is teetering’, says Paul Evans in this week’s lead article. ‘Few in policy circles are persuaded by US arguments about the national security risks in play. Rather what is persuasive is the severity and credibility of US threats if Canada pursues a too close for comfort relationship with China’.

The big strategic question, says Evans, is what choices Ottawa faces as the US–China Cold War intensifies. For Canada, decoupling, reshoring and wholesale sign-on to a total freeze on Chinese engagement mean at worst isolation and at best doubling down on dependence with its continental partner — which, despite growing economic ties with China, accounts for two thirds of Canada’s external commerce. For US allies and partners in the western Pacific, like Japan, South Korea, Australia, New Zealand and Southeast Asia, economic ties are largest with China and not the United States, so for them defining an alternative course of what Evans calls nuanced strategic engagement is even more important.

President Trump’s ‘America First’ policy and his administration’s rationalisation of rampant trade protectionism on the grounds of American job losses with offshoring to other countries, importantly China, has undermined commitment to the open multilateral trade regime. Trump’s attack on the WTO’s dispute settlement system, his espousal of bilateralism and renegotiation of NAFTA in North America and KORUS with South Korea, his withdrawal from the Trans-Pacific Partnership and his effectively launching all out trade and technology war with China have rocked the foundations of the international economic and political system on which they all rely. Mr Trump’s disrespect of US alliance relationships in the region piles on additional uncertainty in Asia and the Pacific about US reliability despite near universal anxieties about China’s heavy-handedness.

The rivalry between the United States and China is not so much about trade and commerce but about the concern in Washington over China’s potential to challenge US global technological supremacy and security dominance. China’s state-driven technological advance, in this American conception, casts China as an unfair competitor that will overwhelm US technology competitiveness and military dominance in the longer term if it is not stopped short now.

Although it’s not clear that Trump himself has any coherent or consistent strategy of confrontation with China (despite the rapid ramp up of his anti-China rhetoric in his bid for re-election), the forces in the United States that advocate extreme economic decoupling and strategic containment and confrontation (such as Pompeo and Peter Navarro) have coalesced within, and captured, the policy space surrounding him to forge the new direction in US foreign and security policy. These developments, whatever their ultimate consequences for the United States itself or for China, leave allies and partners in Asia and the Pacific, deeply enmeshed as they are in China–United States interdependence, struggling to find a way through.

China is not going away, nor is the Chinese Communist Party about to lose its legitimacy — Mr Pompeo’s fulminations add strength to that certainty. Mr Trump and any other hapless Western political leader who chooses to join his crusade against Beijing are not going to change that. It’s nonsense to claim as Pompeo does that China hasn’t changed or played by any global rules since 1978; but it is less clear where it will go now.

Even absent Trump, Washington reversing course on the retreat from globalisation and China decoupling strategies will be a tortuous process and will not happen soon, especially in the aftermath of the COVID-19 pandemic crisis as Beijing meets Washington’s fire and brimstone with more fire and brimstone.

But one thing is certain. It will be vastly easier for the United States itself to reverse course than it will be for Canada, Australia, Japan or Southeast Asian countries if they allow themselves to sign on to Mr Pompeo’s new Cold War agenda. If there were ever a time for strategic caution it is now.

The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.