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
Or start a war.
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.