Wharton's Jeremy Siegel says it's 'scandalous' the U.S. doesn't have a rare earths reserve

China's power implicit important uncommon world materials has been a "threat for a agelong time" to Western proviso chains and the U.S. should make a strategical reserve of the metals, University of Pennsylvania prof emeritus of concern Jeremy Siegel told CNBC's "Squawk Box" Monday.

"It's scandalous that we don't person a uncommon world strategical reserve [and] that we fto China monopolize 90% of refining uncommon world materials," Siegel said. "Where were we, realizing the value of these?"

Siegel's strategical reserve connection comes arsenic the U.S.-China commercialized warfare intensified Friday, with President Donald Trump vowing to enforce "massive tariffs" connected Beijing successful effect to its limits connected uncommon world mineral exports to the U.S., and threatening to cancel a planned gathering with Chinese President Xi Jinping. Trump's announcement erased $2 trillion successful worth from the banal market.

The U.S. created the Strategic Petroleum Reserve successful 1975 successful effect to the 1973 Arab Oil Embargo.

Today, astir 3 quarters of the world's uncommon world minerals, utilized successful everything from smartphones to combatant jets, are mined successful China, which processes 90% of the metals, according to Bank of America analysts.

"Export controls could make a choke constituent successful planetary proviso chains," BofA planetary economist Claudio Irigoyen wrote Sunday successful a enactment to clients.

But Siegel said he's assured the U.S. and China volition resoluteness their latest commercialized struggle earlier Trump's Nov. 1 deadline for much tariffs.   

"It'll beryllium worked out, and it won't beryllium excessively antagonistic for either country," Siegel said. Trump's remarks were "just a prelude to saying, 'All close determination are our chips, we've got cards [and] you've got cards...and let's negotiate.'"

Siegel, writer of 1994's Stocks for the Long Run, said the November 1 deadline is really a motion that Trump hopes to negociate with his Chinese counterpart.

 "Trump said 100% [tariffs] but helium said, 'Listen, I said the November 1 date, which for maine is similar forever,'" Siegel said. "It's really the farthest day he's ever acceptable for the commencement of a tariff, which means helium wants to person that solved." 

Siegel added that the marketplace volition apt drawback backmost pursuing commercialized talks betwixt Washington D.C. and Beijing. The S&P 500 is astir 1.2% higher successful aboriginal trading Monday aft crumbling 2.7% connected Friday.

"Once it's resolved, fixed each the different bully things that are happening, I spot nary crushed wherefore we can't proceed connected to caller highs," Siegel said.

The S&P 500 is regaining immoderate 40% of its Friday losses aboriginal Monday, portion the Nasdaq Composite has climbed astir 2% arsenic exertion stocks rebound from past week's retreat.