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Pompeo is laying ‘landmines’ in U.S.-China relations before Biden takes office, ex-Australian leader says

Secretary of State Mike Pompeo’s latest move on Taiwan could upend a major foundation underpinning the U.S.-China relations — further complicating a tense bilateral relationship just before President-elect Joe Biden takes office, said former Australian Prime Minister Kevin Rudd.

“What Pompeo is doing is laying a whole series of landmines for the incoming Biden administration … salting the earth in the U.S.-China relationship in general, and laying landmines on Taiwan in particularly,” Rudd told CNBC’s “Squawk Box Asia” on Monday.

Over the weekend, Pompeo announced the lifting of all “self-imposed restrictions” in U.S. relations with Taiwan — a democratic and self-ruled island that China claims as its own territory.

Pompeo said in a statement on Saturday that the U.S. had unilaterally limited contact between its officials and their Taiwanese counterparts for several decades “in an attempt to appease the Communist regime in Beijing.” He then declared all those restrictions are “no more.”

U.S. Secretary of State Mike Pompeo speaks at the U.S. State Department

Win McNamee | Getty Images

The move could mark the end of the “one China policy,” said Rudd, who’s now president of Asia Society Policy Institute.

The one China policy is the principle in which the U.S. and the international community recognize that there’s only one Chinese government — under the Communist Party of China in Beijing.

“That has been the mainstay of strategic stability for the last 40 years or so,” said the former Australian leader.

“I think we need to understand that we are moving to the end of the ‘one China policy.’ And what does that mean for markets? What does that mean for the international community? It means a new period of real strategic instability given this is a fundamental item of faith in Beijing,” he added.

The communist party has never governed Taiwan, but Beijing considers the island’s reunification with the mainland an eventuality and so Taiwan has no right to participate in international diplomacy of its own.

China and Taiwan react to Pompeo’s move

China reportedly slammed the U.S. decision to lift restrictions on Taiwan, while the Taiwanese Ministry of Foreign Affairs thanked Pompeo on Twitter.

Zhao Lijian, a spokesman from Chinese foreign ministry, said China opposed Pompeo’s move and will resolutely fight back attempts to sabotage its interest, reported Reuters.

Meanwhile, Taiwan’s Foreign Minister Joseph Wu said Pompeo’s removal of U.S. restrictions on contact with Taiwan is a “big thing,” the news agency reported.

“Taiwan-U.S. relations have been elevated to a global partnership. The foreign ministry will not let our guard down and hope to continue to boost the development of Taiwan-U.S. ties,” Wu reportedly said.

Rudd said Pompeo may be motivated to harden U.S. stance on China now so that he can attack Biden as “having gone soft” on China should the new administration make any policy changes. Some media reports have named Pompeo as a potential 2024 presidential candidate.

Nevertheless, the Biden administration is unlikely to shift away from the “strategic ambiguity” that has long been U.S. foreign policy on Taiwan, said Rudd.

The ambiguity helps maintain “sufficient doubt” that the U.S. would immediately defend Taiwan should the island embrace any “reckless policy” such as a unilateral declaration of independence from China, explained Rudd.

The other dimension of the U.S. stance involves challenging any assumption by Beijing that Washington will not react if the mainland takes any military action on Taiwan, added Rudd.

“That’s the strategic ambiguity up until now. I don’t see that as changing.”

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