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Veteran economist Jeremy Siegel has called for the establishment of a strategic reserve of rare earth materials in the U.S. to counter China’s dominance in the sector.
Siegel, speaking on CNBC’s “Squawk Box” on Monday, said that China’s control over rare earth materials has long been a threat to Western supply chains. He proposed the creation of a strategic reserve of these metals in the U.S.
“It’s scandalous that we don’t have a rare earth strategic reserve [and] that we let China monopolize 90% of refining rare earth materials,” Siegel said.
“Where were we, realizing the importance of these?”
China currently mines almost three-quarters of the world’s rare earth minerals and processes 90% of the metals. This has become a significant issue amid the U.S.-China trade war, with President Donald Trump threatening to impose tariffs on Beijing to counter its rare earth export restrictions.
Siegel expressed confidence that the trade conflict would be resolved, saying it “won't be too negative” for either country. He is also confident that Trump wants to negotiate better and resolve the issue by setting the farthest date. “…he wants to have that solved.”
See Also: China Sanctions 5 US Subsidiaries Of South Korean Shipmaker Hanwha Ocean Amid Rising Trade Tensions
Experts have suggested that the U.S. has several options to secure its own rare earth production, although they warn of significant challenges. The U.S. possesses the majority of the 17 rare earth elements and 50 critical minerals, and the industry is expected to respond if the government implements strategies to support the development of a domestic rare earth supply chain.
Meanwhile, rare earth stocks such as Critical Metals Corp. (NASDAQ:CRML) and USA Rare Earth Inc. (NASDAQ:USAR) closed 55.41% and 18.36% higher, respectively, on Monday, driven by geopolitical developments. U.S. policy moves, trade tensions with China, and a $1.5 trillion investment pledge from JPMorgan Chase (NYSE:JPM) boosted the sector.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
