Possible scenario
Trade Retaliation Cycle
22% Chance
Trump responds to Lula's warning with new tariff threats, visa restrictions, or sanctions against Brazilian judicial officials, echoing the July 2025 pattern. This is less likely than diplomatic containment but plausible given the prior tariff escalation over Bolsonaro's trial.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Non-Energy Materials -0.8%
- Industrials -0.8%
Portfolio impact
S&P 500-1.1%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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