The United States is preparing for a significant adjustment in its critical minerals policy, with platinum group metals now facing a substantial risk of being subject to Section 232 tariffs.

On October 22, reports from the trading desk revealed that Deutsche Bank's latest research indicates that platinum and palladium are likely candidates for tariff recommendations due to their highly concentrated supply chains, high dependence on imports, and increasing geopolitical risks from major suppliers. This situation arises as the U.S. Secretary of Commerce is expected to submit a crucial report on critical minerals.

According to the report, the submission of this critical minerals report, required under Executive Order 14272, has been delayed. It is intended to assess the national security implications of imports of critical minerals, including platinum, palladium, and an added focus on silver. Additionally, the U.S. International Trade Commission was set to release its preliminary anti-dumping ruling on Russian palladium on October 20. Therefore, palladium faces dual policy risks from these developments.

Deutsche Bank's policy risk scorecard assigns high scores to platinum and palladium across several dimensions including global supply concentration, import dependency, supplier risk, and economic impact on the U.S., significantly exceeding other metals such as copper. Given Secretary of Commerce Gina Raimondo's public support for using tariffs as a tool to stimulate U.S. manufacturing, the likelihood of recommending Section 232 tariffs on platinum group metals has significantly increased.

The bank believes that these potential trade restrictions will exacerbate the existing supply tensions in the white precious metals market. Currently, the leasing rates for platinum group metals are above normal levels, leading to rising operating costs among industrial users. Earlier this month, Umicore, a well-known refining and recycling company, opted to sell its long-held gold inventory in favor of leasing, highlighting market pressures.

The Evolution of the Critical Mineral List The report cites that the critical mineral list published by the U.S. Geological Survey originates from Executive Order 13817, released during Trump’s first term in 2017, titled "Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals." This order mandated that a critical mineral list be created within 60 days and that a cross-departmental strategy plan be coordinated by the Department of Commerce within 180 days.

The 2019 federal strategy document emphasized the entire critical mineral supply chain, including processing and manufacturing, rather than merely focusing on mining capabilities. It concurrently placed economic and military considerations on equal footing, recognizing both as strategically vulnerable to supply disruptions.

The document notably references "foreign trade practices that distort markets," pointing toward potential responses under Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962 concerning national security.

The second edition of the list in 2022 introduced critical methodological updates. The supply concentration metric not only considers a country's share of global production but also incorporates factors like disruption potential, supply capacity index, and supply willingness index.

The supply capacity index is derived from the Fraser Institute's policy perception index, which assesses the political stability, security, infrastructure, and trade barriers of producing countries. The supply willingness index evaluates the trade, ideological, and defense ties between producing countries and the U.S.

The forthcoming third edition of the list in 2025 will adopt a more data-intensive and industry-level economic impact assessment methodology, discarding earlier quantitative indicators like supply concentration and net import dependency, while emphasizing the quantifiable economic impact on U.S. GDP.

Assessing the High-Risk Scores of Platinum Group Metals According to Deutsche Bank's constructed policy risk scorecard, platinum and palladium demonstrate high-risk profiles across multiple dimensions. Specifically:

In terms of global supply concentration, platinum has a Herfindahl-Hirschman Index (HHI) of 5230, while palladium stands at 3137, both far exceeding the highly concentrated threshold of 2500. In comparison, silver's HHI is 1139, gold's is 481, and refined copper's is 1035.

Regarding net import dependency, platinum's net import ratio is 85%, surpassing the high dependency threshold of 50%. Silver stands at 64%, also above the threshold. In contrast, palladium’s ratio is 36% and refined copper is 45%, both below the threshold. Notably, the U.S. is a net exporter of gold.

For import supply concentration, platinum's import HHI reaches 4215, while palladium’s is 3301, silver’s is 2833, and refined copper’s is 4640, all exceeding the 2500 threshold. Gold's import HHI is relatively low at 1457.

In the supply capability index, South Africa (the primary supplier of platinum) has a risk score of 81, while Russia (the primary supplier of palladium) has a score of 90, both categorized as high risk. Mexico (the main supplier of silver) has a score of 60, indicating medium risk. Canada (primary supplier of gold) scores 33, and Chile (main supplier of refined copper) scores 34, both categorized as low risk.

Policy Tools: Tariffs vs. Industry Support The U.S. has adopted non-tariff strategies in the development of rare earth element supply chains. In July 2025, the Department of Defense announced a public-private partnership with MP Materials, involving direct government investments through convertible preferred shares and warrants, providing federal loans for heavy rare earth separation expansions, and signing a ten-year purchase agreement with a magnet manufacturing facility set to commence in 2028, along with a ten-year price protection agreement for neodymium-praseodymium oxide products at $110 per kilogram.

This week, the U.S. and Australia announced a "Critical Minerals and Rare Earths Mining and Processing Supply Security Framework," committing $1 billion in financing over six months for projects located in both countries, including a pricing framework with price floor or similar measures.

These policies align with the bipartisan policy center's proposed federal critical mineral investment principles:

Flexible fiscal support to mitigate price risks, long-term demand certainty, and strategic alignment with national security objectives. Price protection policies logically surpass tariffs as they allow payments above U.S. long-term marginal costs in situations where international prices are too low while avoiding unnecessary cost increases for domestic downstream manufacturers when international prices are high.

However, Commerce Secretary Gina Raimondo advocates for tariffs as favorable to U.S. manufacturers and claims they will not lead to higher consumer prices. This stance sharply contrasts the orthodox approach to rare earth policies.

The report notes that the copper policy precedent is noteworthy: In February 2025, the president issued an executive order initiating a Section 232 investigation; by June 30, the Commerce Department submitted a report concluding that "import volumes and global overcapacity are undermining the economy"; on July 30, tariffs were imposed on semi-processed copper and copper derivatives (with refined copper delayed). This rapid timeline could potentially be mirrored concerning platinum group metals.

Deutsche Bank believes that with the Secretary of Commerce's report already overdue, the established 180-day deadline has passed since the executive order was issued on April 15. A recent U.S. government shutdown may further delay this timeline. However, based on scorecard analyses and the Secretary's policy inclination, the risks of recommending Section 232 tariffs on platinum and palladium are significantly high, with silver facing moderate risk and gold at lower risk.

Currently, the platinum group metals market is showing signs of supply tension. Leasing rates above normal levels are increasing the operational costs for industrial users, many of whom are opting to lease rather than own the metals. Umicore recently chose to sell its long-held gold inventory in favor of leasing, reflecting market pressures.

Deutsche Bank points out that if the U.S. imposes Section 232 tariffs on platinum and palladium, it will further heighten supply chain pressures. South Africa is the world’s largest producer of platinum, with an estimated output of 120,000 kilograms in 2024, maintaining a dominant position in global supply. Russia is the largest producer of palladium, expected to produce approximately 75,000 kilograms in 2024. The U.S. imports nearly 50% of its platinum from South Africa and similarly imports palladium from Russia.