Asian central banks will be tempted to rush out of their treasuries, but they will not have any buyer save the fed who will print. So actually they can't sell, so they won't sell. Dollar will tank, huge capital flight, americans will be forbidden to hold foreign assets, currencies, gold...
Oil exporting countries will ask for delirial dollar prices, same for most commodities (should'nt change much in euros). This is the only issue for US: trade will stop, which is now near-neutral except for oil (no more consumer goods from China, but no more boeing export, you don't want to depend on Zimbabwe for spares, do you ?)
Oil consumption will have to be curtailed 75% nearly overnight in the US: they will experience a monetary peak oil before the geologic peak. Expect curfews, rationing, martial laws... Next will come wars of annexion (Mexico, Venezuela, may be even Canada, who knows)
The Chinese will be very much in pain: urban unemployment will sky rocket, import capacity (paid with the stock of treasuries) will be greatly diminished for oil, commodities, including foodstuff. Expect Pol-pot style redeployment towards the countryside. Expect talks of war of annexion (Indonesia, Australia...) and revenge (US).
You can call me a doomer. Pierre
That is how it will probably be in the absence of Something Completely Different: which I actually believe that there could be.... "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Similar situations are undoubtedly going to crop up if you analyse other strategic industries - after all, one of the characteristic features of strategic industries is that they involve actual infrastructure that can't be juggled around as rapidly as financial instruments (and hence is boring and sclerotic and so on and so forth).
So if there is a major seize-up in trade, I'd expect the rest of the world to be hit harder than you seem to imply, and the US to be hit less hard.
OTOH, I don't see why foreign trade would have to screech to a complete halt. Sure, if people don't trust your currency, you can't run a trade deficit, but what prevents you from running a neutral or surplus foreign trade? The former only requires functioning infrastructure (which is a requirement for trading at all anyway), while the latter requires only functioning infrastructure and that there exists a trusted currency somewhere. Doesn't have to be your own.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
