Yesterday, The New York Times reported that China is blocking shipments of rare earth minerals to the United States. Though China has said the report is false, it still underscores U.S. vulnerability to Chinese trade decisions. This all comes as the Obama administration is investigating China’s green technology trade policies. U.S. Trade Representative Ron Kirk is looking into a lengthy petition by the United Steelworkers that accuses China of violating World Trade Organization rules by unfairly subsidizing exports of clean energy technology and controlling its rare earth minerals supplies.

Rare earth minerals, or rare earth elements, are essential components of scores of important products, including wind turbines, hybrid vehicles and cell phones. China has worked over the last two decades to develop its rare earth minerals, and now much of the world is dependent on the country for the vital resources. China currently produces 97 percent of the world’s rare earth minerals.

Rare earth minerals are also components of key technologies used by the military, including in communications equipment and smart bombs. But the U.S. military has never undertaken a comprehensive inventory of how reliant it is on rare earth minerals. The survey is now finished, and is currently being reviewed by key military officials, DOD spokeswoman Cheryl Irwin said.

Christine Parthemore, a fellow at the Center for New American Security, said the DOD review was essential because the U.S. military has very little sense of how much it relies on rare earth minerals.

“In defense equipment, because stuff is manufactured by the private sector, and [the private sector] is not involved in the end-use of these products. … There’s sort of a detachment of information that happens,” Parthemore said, explaining that the U.S. military is often not privy to suppliers’ use of rare earth minerals because it is considered proprietary information.

The chart, included in an Economic Policy Institute primer on the issue, illustrates the United States’ massive trade deficit with China on clean energy technology, a deficit that estimates indicate has more than doubled in the last two years. The Economic Policy Institute put it this way:

Overall, imports of clean energy products increased 74% per year, on average, between 2000 and 2010.  U.S. exports also increased very rapidly, but from a tiny base.  As a result, the U.S. developed large and very rapidly growing trade deficits with China in clean energy products.

It’s this trade deficit with China that’s got the United Steelworkers all worked up. The Steelworkers are concerned that China is going to leave the United States in the dust and the union is hoping it can stop China before it’s too late. In a 5,000-page-plus petition to the Obama administration, the union alleges that China is breaking a number of World Trade Organization rules by subsidizing key energy technology exports, among other things.

The Obama administration announced last week that it’s investigating the Steelworkers’ allegations. In the next 90 days, the administration (led by United States Trade Representative Ron Kirk) will decide whether to bring a trade case before the WTO.

As I noted earlier today, the announcement has already led to heightened tension between the U.S. and China. A Chinese official accused the administration of trying to score political points ahead of the midterm elections (It’s not clear whether it was the administration’s intent, but the announcement was popular on both sides of the aisle). And today, The New York Times reported that China is blocking shipments to the United States of rare earth minerals necessary in the manufacturing of key clean energy technologies.

But challenging China’s trade policies is just one way to ensure that the United States can compete on the world stage. Without the right policies, economists say it will be nearly impossible to develop the so-called “clean energy” economy that President Obama and others have been touting for years. At the end of the day, the United States imports so many components for clean energy technology not just because it’s so cheap to buy them from China and other countries, but also because the U.S. clean energy manufacturing sector is underdeveloped.

If this is true (the Times quotes three anonymous sources), it’s a big deal. The move is the latest indication that China isn’t afraid to play hardball with the United States, particularly now that the administration has publicly raised concerns about China’s trade policies. This weekend, Chinese officials denounced U.S. efforts to investigate a series of allegations made by the United Steelworkers that China is breaking WTO rules by offering manufacturers in the country unfair advantages.

At a news conference on Sunday, Zhang Guobao, a Chinese official, said:

I have been thinking: What do the Americans want? Do they want fair trade? Or an earnest dialogue? Or transparent information? I don’t think they want any of this. I think more likely, the Americans just want votes.

Guobao also dismissed a 5,000-page-plus petition by the United Steelworkers laying out the trade concerns with China, arguing that the United States cannot win a trade case on the issue at the World Trade Organization. The Steelworkers’ petition alleges that China is breaking WTO rules by offering manufacturers in the country unfair advantages.

As I’ve reported, China’s efforts to become a world clean energy leader have become a significant political issue for both Democrats and Republicans. In fact, it’s one of the few issues that both parties have rallied around. The investigation into China’s trade practices will be closely watched in the coming months — it’s shaping up to be a major fight.

U.S. Trade Representative Ron Kirk said today that he would investigate the claims made in the petition during the next 90 days.

In a statement, Kirk said:

We take the USW’s claims very seriously, and we are vigorously investigating them. In light of the large number of allegations and the extensive documentation accompanying them, I have asked my staff to utilize the 90-day period allowed by statute to thoroughly examine and verify the USW’s claims. For those allegations that are supported by sufficient evidence and that can effectively be addressed through WTO dispute settlement, we will vigorously pursue the enforcement of our rights through WTO litigation.

In the 5,000-page-plus petition, the United Steelworkers allege that China is breaking World Trade Organization rules by offering manufacturers in the country unfair advantages.

Kirk’s statement summarizes the steelworkers’ petition this way:

According to the petition, these policies include export restraints, prohibited subsidies, discrimination against foreign companies and imported goods, technology transfer requirements, and domestic subsidies causing serious prejudice to U.S. interests. The petition further alleges that China’s policies have caused the annual U.S. trade deficit in green-technology goods with China to increase substantially since China joined the WTO, making China the top contributor to the U.S. global trade deficit in the sector.

In a story this week on the United States, China and green energy, I laid out the United Steelworkers’ allegations:

The United Steelworkers, in a September petition to the Obama administration, argue that China is unfairly subsidizing exports to encourage companies in the country to send their clean energy products around the world. At the same time, the union accuses China of limiting the exports of certain rare-earth minerals necessary to produce solar panels so that foreign companies will settle in the country.

Both of these charges would be violations of international trading rules, and the United Steelworkers are hoping that the Obama administration will raise the issue in front of the World Trade Organization. “I do think they will take up some of this because some of it is so obvious,” said Linda Andros, legislative counsel on trade law issues at the United Steelworkers. “They don’t have to. They have discretion. But on the merits the case is there. The blatant stuff you’ve just got to take up.”

In a Sept. 15 op-ed in The Wall Street Journal, Lomborg accused the Guardian of taking his comments out of context.

So, to clear things up, here’s what Lomborg believes: cutting greenhouse gas emissions through some kind of cap on carbon emissions is “woefully ineffective” in terms of economics. “[W]hile every dollar spent on fighting malnutrition would yield nearly $20 in benefits, every dollar spent on cutting carbon would avoid much less than a dollar of global warming damage,” Lomborg said in the op-ed.

Instead, he said, the best option is to invest in green technology, or as Lomborg puts it, “making green energy so cheap everyone wants it.” Lomborg says that’s where the Guardian got it wrong:

What happened next was startling. The Guardian reported my commonplace observation as evidence of “an apparent U-turn” by “the world’s most high-profile climate change skeptic.” This set off a media stampede; news organizations around the world scrambled to report my so-called change of heart.

I tried to explain that I had always considered climate change to be a problem. The only thing that had changed was that we finally had some good solutions to consider. Some people took the point, but just as many didn’t. As far as the latter group was concerned, I had finally seen the light, and that was that.

In a statement, Brown said:

There is nothing normal or fair about the way China trades. If we are going to compete in the global clean energy manufacturing industry, we need strong trade enforcement. Every day we delay enforcing trade rules, China spends $51 million a day to speed past us in the race to lead the world in clean energy manufacturing, while elbowing competition out of the way through unfair subsidies and discriminatory tactics.

I applaud the United Steelworkers for filing this petition, and urge the Administration to work without delay alongside workers and businesses to challenge China’s trade practices at the WTO.

The United Steelworkers, in the petition, called on the Obama administration to challenge the subsidies through the WTO process.

Well, during a press conference today in Chicago, in which President-elect Barack Obama officially named Richardson as his choice to fill the slot, Obama made the case that commerce secretary would play a key role on the new administration’s economic team.

While it is traditionally considered a plum position for big-time campaign fundraisers, Obama said Richardson will be “central to everything we do” and will deal with “the most significant issue America faces right now, and that is how do we put people back to work and rejuvenate the economy.”

Obama emphasized that Richardson’s experience as energy secretary will place him front and center in creating “a new, clean-energy industry and create the green jobs of the twenty-first century. Jobs that pay well and won’t be shipped overseas — jobs that will help us end our dependence on foreign oil.”

Indeed, if Richardson was disappointed with the position — as one reporter said, he was rumored to be in the running for the more glamorous job of secretary of state — he did not let on, but rather embraced Obama’s economic vision:

There’s a vital role for the Department of Commerce in our economic recovery. The official role of the department is job creation, economic growth, sustainable development, and improving living standards – the same goals of [Obama's] economic plan.

The unique strengths of the department and its talented public servants make it the natural agency to serve as the programmatic nerve center in America’s struggle to rejuvenate our economy.

The catch-phrases of [Obama's] economic plan: investment, public-private partnerships, green jobs, technology, climate change and research – that is the department of commerce [...]

With your leadership, Mr. President-elect, America will once again be the forefront of innovation, especially in the new frontier of energy independence and clean energy jobs. We will create new technologies the world is seeking, while creating millions of new jobs that can never be outsourced.

Richardson, who is of Latino descent, also made a short statement in Spanish, which he did not translate.

Obama joked that he was “deeply disappointed with the loss” of the clean-shaven Richardson’s beard, which he sported during the Democratic primaries.

Even if Richardson, like other commerce secretaries, does his work mostly behind the scenes, he almost certainly continues to harbor presidential ambitions, and adding a second cabinet post to his already very extensive resume can’t hurt.