The threatened measures against Brazil will add to the growing uncertainty and fears in financial markets as to where the tariff war is leading, causing further questions to be raised about the stability of the US dollar as the global reserve currency.

When U.S. President Donald Trump linked 50% tariffs on Brazil to the trial against his ally, the country's former far-right leader, Washington left Latin America's largest economy with few options to deescalate but may have overestimated the country's vulnerability to the levies.