Krugman has this to say about it:
For those not familiar with how financial markets work, US Treasuries are the ultimate safe asset, used as collateral for everything. Even a hint that some Treasuries might not be honored could bring everything to a screeching halt
Musk and Trump are both in the habit of stiffing people they owe money. If markets even suspect that this habit will extend to Treasuries, God help us
A lot of countries have defaulted without doing that. I’m a lot more concerned that it’ll cause an interest rate spike, with associated stock market crash, and bring on a sharp cut in business investment and employment.
Countries are already looking for alternatives to trading with America, the felon is speedrunning Brexit along with everything else.