US President Donald Trump’s economic policies are, in aggregate, expected to be negative for near-term platinum demand and prices, industry organisation the World Platinum Investment Council’s (WPIC’s) latest ‘Platinum Perspectives’ report indicates.

Protectionist activities and tariffs especially are viewed as inflationary, which is likely to lead to a slowdown in the US Federal Reserve’s rate cutting trajectory and support a stronger dollar.

The council notes in its Platinum Price Attribution Model (PPAM) the inverse relationship of platinum prices with the US ten-year yield and dollar:rand exchange rate, respectively.

Inflation is also expected to put pressure on consumers’ pockets, which could negatively impact on platinum demand from the automotive and jewellery sectors, where demand is positively correlated to the platinum price (as per the PPAM).

Trump has implemented a 25% tariff on imports from Mexico and Canada, and added 10% to existing China tariffs.

A universal global tariff has yet to materialise, which could see the feed-through market impact being nuanced at the onset, the WPIC says.

It points out that the US is a net platinum group metals (PGM) importer, at about 560 000 oz/y (7% of global demand) and about 400 000 oz/y of palladium (4% of global demand).

With metals included within the tariffs, and given limited scope to increase US domestic output, this could result in a shortage of metal in the US and a jump in lease and exchange for physical (EFP) rates, the council warns.

Recycling constitutes about 80% of US domestic supply, and the Stillwater mine in the country would require considerably higher prices to reverse the about 40% capacity rightsizing undertaken in 2024, the WPIC points out.

It adds that the Lac de Iles mine in Canada risks losing the US as an export destination, as, currently, South African PGMs are not facing tariffs.

While tariffs may support US domestic metal prices, the broader macro-overlay points to downside risks to platinum prices, the council asserts.

It warns that the US’s tariffs will invariably be inflationary, considering that the country’s yearly trade deficit is reaching high levels.  

In parallel, stricter immigration policies will likely raise US labour costs, another inflationary factor.

The council mentions that higher inflation risks the need for rate hikes.

Higher rates support dollar strength, with both factors negative for platinum prices.

The council’s price attribution model imputes a 100 basis point increase in US yields leads to a $24/oz decrease in the platinum price and a R1 increase leads to a $60/oz decrease in the platinum price.

In addition to the macro factors, higher inflation will likely weigh on consumer spending, adding to an economic slowdown, the council explains.

North America accounts for about 15% of automotive platinum demand and about 25% of platinum jewellery fabrication.

A slowdown in consumer spending would reduce platinum demand through lower new vehicle and jewellery purchases, the WPIC posits.

In 2024, North America’s cumulative platinum automotive and jewellery demand exceeded 900 000 oz, with the council’s price attribution model imputing that a 100 000 oz change in demand would impact platinum prices by between $23/oz and $28/oz.