does varnaes effect target himself

If he is the attacker and you can exhaust him (possible with Press the Attack or similar) for the effect, he can target himself. Varnae's effect only targets the attacker.

EDIT: Changed attack to effect to make more sense.

His effect has a target, but it is the opponents attacker. The rest of his effect is self referential and has no target.

If he were attacking, and somehow made ready and you activated his power to target himself, then yes, he could be the target. Otherwise, no, it is not targeting him, it is only targeting the attacker

so, spider tracer won't stop it?

Not unless Varnae were to be an attacker and attempt to target himself.