Tariffs and trade tensions can influence the platinum market, but their impact is somewhat muted compared to other commodities due to platinum’s unique characteristics and diverse uses. Platinum is a rare precious metal with applications spanning automotive catalytic converters, jewelry, industrial processes, and investment. This diversity helps shield its demand from being drastically affected by trade barriers.
When countries impose tariffs or face trade disputes, global economic growth often slows down. This slowdown can reduce demand for many industrial metals because manufacturing and consumption decline. However, for platinum, the effect tends to be less severe because its uses are spread across various sectors that do not all react the same way to economic changes.
Despite some risk of reduced demand due to tariffs—potentially lowering annual platinum use by about 1%—the overall forecast for 2025 still shows a significant structural deficit in supply versus demand. The market has been running deficits for several years now; this means more platinum is consumed than produced or recycled each year. Such deficits have led to shrinking above-ground stocks of platinum worldwide.
This ongoing shortage creates tightness in supply that supports higher prices and elevated lease rates (fees paid when borrowing physical metal). Even if tariffs slow down some parts of the economy or certain industries’ use of platinum, it’s unlikely they will erase this fundamental imbalance between supply and demand anytime soon.
Moreover, strong demand from key markets like China continues despite tariff concerns. Chinese consumers are increasingly favoring platinum jewelry over gold because gold prices have surged so high that many buyers find it unaffordable. This shift boosts overall consumption of platinum in jewelry alongside steady industrial needs.
In summary, while tariffs and trade tensions introduce some uncertainty into global markets—and could slightly dampen growth—they do not drastically alter the outlook for platinum due to its broad range of uses and persistent supply shortages driving strong underlying demand pressures globally.