Praise be to Allah, the Lord of the Worlds; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.
Marrying the chaste women of the People of the Book is permissible but it is surrounded by many dangers; foremost is the danger to the religion of children, particularly from women, in those countries where the rules support a mother more than the father.
Now, since the marriage has been consummated and you already have a child you should weigh the benefits and harms of divorce. If you think that continuing life with this woman is better than leaving her then keep her as your wife. If you think that being with her will harm the religion of your child and you can be avoid such harms through divorce then it is better to divorce her.
The main point is protecting the religion of your child, that is the basis for deciding whether to remain with her or to divorce her.
Allah knows best.