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Mr. Pompeo is making clear that the world has entered a new era in its relations with China. While some pushback against hostile Chinese actions occurred in the Obama years, it has intensified in the Trump period and gained bipartisan support. Pushback is now U.S. policy, expected to continue no matter who wins November’s presidential election. Israel remains focused on Iran and other regional concerns, but it can’t ignore the world’s new great strategic challenge.

At issue in Israel are commercial activities of Chinese companies, but the first two major U.S.-Israel clashes over China were about military contracts. In the late 1990s, U.S. officials objected to a planned sale to China of the Israeli-made Phalcon airborne radar system. Israel bowed to U.S. pressure in 2000, canceled the sale, refunded China nearly $200 million, and paid it more than $150 million on top in damages.

The second clash, which occurred during George W. Bush’s presidency and involved Israel’s Harpy antiradar missile, had far-reaching consequences. In 2005 the director general of Israel’s Defense Ministry was fired after losing the trust of U.S. defense officials. The Knesset enacted new export-control legislation and Israel’s Defense Ministry concluded an information-sharing agreement with the Pentagon. Most important, in 2005 Israel terminated altogether its defense trade with China.

Even without military sales, China has grown to become Israel’s second-largest trading partner, after the U.S. In 2018, China imported more than $4.6 billion of Israeli goods, while exporting to Israel goods worth more than $10.9 billion. These numbers are up dramatically from 1992, when Chinese goods imports totaled only $38.7 million, and exports $12.8 million.

Until recently, U.S. officials generally didn’t view nonmilitary business with China as a strategic problem. After the famous Nixon-Mao meeting in 1972, the U.S. championed China’s economic growth and aided its technological development. One goal was to promote liberalization, which, in time, was expected to make China less repressive at home and less threatening abroad.

Chinese President Xi Jinping has killed the liberalization theory. Achieving economic growth through greater use of technology, China under his leadership has increased its domestic repression and adopted aggressive foreign policies. It needs technology from abroad to fulfill its strategic ambitions.

Mr. Xi’s Belt and Road Initiative, a long-term infrastructure-development strategy, has made China the financier, builder, owner and operator of ports, highways and other projects linking China to the rest of the world. The initiative increases China’s economic power, technological know-how, political influence, and intelligence and military capabilities.

In Israel, Chinese firms have been responsible for expanding the port in Ashdod, on the Mediterranean, and constructing major transportation systems, including the Tel Aviv light-rail system and the Carmel tunnels. A Chinese company has an exclusive contract to operate a new container terminal at the port of Haifa for 25 years beginning in 2021. And if a railway from Eilat, on the Red Sea, to Ashdod wins Israeli government approval, a Chinese company is poised to build it. Meanwhile, Chinese firms are active as business investors. Their investments in Israeli high-tech companies in 2017 totaled around $600 million, an impressive increase from $232 million in 2013.

Though a small country, Israel looms large in China’s foreign trade and investment vision because Israeli companies are so good at creating, applying and selling technology. Israel has been eager to welcome the Chinese as customers and investors, but there are downsides in doing so. These include the theft of Israeli technology, the possibility that China will transfer it to Israel’s enemies in Iran or elsewhere, and the risk that China will exploit Israeli technology in ways that endanger U.S. armed forces, putting the U.S.-Israel relationship at risk.

These are hazards to which American officials are increasingly attuned. Israelis will have to become similarly sensitive. Even before Mr. Pompeo’s trip, press reports said U.S. officials were voicing disapproval of the role Chinese companies will be playing at the port of Haifa and in construction of a large desalination plant in Nahal Sorek, south of Tel Aviv. U.S. officials have also warned about transfers to China of Israeli manufacturing know-how and surveillance capabilities.

Israelis have taken these concerns seriously, but, from the American point of view, not as seriously as they should. At Washington’s urging, last year the Israeli government created an interagency committee to review foreign investments, but it lacks jurisdiction over all relevant high-tech projects. The limitation was crafted to avoid offending China, so it antagonized U.S. officials instead.

With ample enemies in their immediate vicinity, Israelis haven’t historically looked at China as a national-security problem. But the world is changing. That doesn’t mean that China should be categorized as an enemy or that all commerce with China should cease, either for Israel or the U.S. It means that both countries should see China clearly, in light of Mr. Xi’s ambitions, strategy and actions. Israel should understand how U.S. national-security officials perceive China—and how its entanglements with China will affect one of its prime strategic assets: its U.S. alliance.

Mr. Feith, a senior fellow at Hudson Institute, served as undersecretary of defense for policy, 2001-05.