Brazilian assets saw volatility spike as traders rushed to assess the endgame of President Donald Trump’s threat to impose 50% tariffs on all goods from the South American nation.

Lula was responding to Wednesday's threat by his US counterpart, Donald Trump, to impose a 50% import tax on Brazilian goods from 1 August. In a letter, Trump cited Brazil's treatment of former President Jair Bolsonaro as a trigger for tariff-hike.

It shows that personal grudges rather than simple economics are a driving force in the U.S. leader’s use of tariffs.