As Brazil’s Luiz Inacio Lula da Silva and Donald Trump trade blows, the person they are fighting over has sent mixed signals to investors trying to divine who will blink first.

Brazil’s President forcefully rebuked Trump after the U.S. leader called the prosecution of Lula’s predecessor, Bolsonaro, a “witch hunt” and hiked tariffs on the Latin American nation.

Trump announced new 50 per cent tariffs on Brazilian steel exports. Brazilian President Lula warned that unilateral moves by Washington would trigger countermeasures under the Law of Economic Reciprocity.