Some observers think Trump might do other things after his new tariff on imports. America is the world's financial center and gives out the dollar everyone uses. The U.S. has a number of levers, from credit cards and the provision of dollars to foreign banks which Trump can use to make other countries do his bidding.
Using these weird weapons would hurt America too, and might even blow up in his face, but observers say we shouldn't ignore these doomsday scenarios.
This would be super true if the tariffs don't fix America's trade problem with other countries. Lots of economists think this might happen because America don't have enough workers since almost everyone already has jobs.
China hit back on Friday which made everything worse and U.S. stocks went down more.
"I could imagine that Mr Trump gets frustrated and tries to implement silly ideas, even when they don't make sense," said Barry Eichengreen, professor of economics and political science at the University of California, Berkeley.
MAR-A-LAGO AGREEMENT
The U.S. government's plan that's not really secret is to fix trade by making the dollar weaker. One way to do that is to get foreign central banks to make there own money worth more.
This might happen in a Mar-a-Lago agreement, which is like the Plaza Accord from 1985 that put a lid on the dollar, but named after Trumps Florida resort, according to a paper by Stephen Miran who Trump picked to be his top Council of Economic Advisers.
The paper from November suggested that America would use threats of tariff and promise of security support to make other countries make their currency stronger against the dollar, plus other concessions they'd have to do.
But Economist don't believe such a deal would work in Europe or China because the economy and politics are way different than 40 years ago.
Maurice Obstfeld, a senior fellow at the Peterson Institute for International Economics, said "I think that's a really unlikely idea." Obstfeld said tariffs were already imposed, so they can't be used as a threat anymore, and America's promise to keep the world safe got weaker because it wasn't clear about helping Ukraine.
He also said that central banks in Japan, Britain, Europe zone, and America probably wouldn't take a deal that would force them to raise interest rates and maybe cause a recession.
And Freya Beamish, the chief economy expert at TS Lombard, said making the yuan stronger would go against what China needs to do to help its struggling economy.
Even in Japan, where the government constantly intervened in the currency market these last few years to help the yen, memories of 25 years of deflation that only just stopped might make them not want the yen to get too strong.
DOLLAR BACKUP PLAN
If they can't get an agreement, Trumps administration might try tougher tricks, like using the dollars special place as the currency everyone trades with, saves, and invests in.
This could look like threatening to turn off the Federal Reserves currency pipes for other countries central banks, which let them borrow dollars if they give there own money as backup, according to Obstfeld.
When money markets stop working and investors run to the safety of dollars, this is a super important source of funding.
It would affect banks in Japan, Europe zone, and Britain, where there's market worth many trillions for borrowing dollars.
Of course, the Fed controls these "swap lines," and Trump never said he wants to take over the powerful monetary institutions.
But many observers got worried when they saw him replace important personnel lately, including at regulatory agencies.
Spyros Andreopoulos, founder of Thin Ice Macroeconomics consultancy, said, "It's no longer impossible that in a bigger negotiation this could be used as a nuclear threat." He thought this would eventually make the dollar currency less reliable as a global currency
The Credit Cards
The big credit card companies Visa and Mastercard are just two examples of payment giants America has in its toolbox.
While Japan and China have made there own ways to pay electronically, the two U.S. firms handle two-thirds of card payments in the 20-country euro zone.
Phone app payments, mostly run by U.S. companies like Apple and Google, make up almost one-tenth of store purchases.
In a huge market worth more than 124.7 trillion dollars in the first half of last year, this change has put Europeans at a disadvantage. If Visa and Mastercard got pressured to stop services, like they did in Russia after it attacked Ukraine, Europeans would have to use cash or slow bank transfers to shop.
"That the US has turned mean is a huge problem," Maria Demertzis, chief economist for Europe at the Conference Board think tank, said.
This put Europe in danger of "economic pressure and coercion," according to the European Central Bank, and a digital euro might fix it. But the plans to make this digital money got stuck in discussions and might take years to start using.
European officials are thinking about possible answers to Trumps actions, but they're scared of making things worse. They could put on their own tariff or do more extreme things like stopping U.S. banks from doing businesses in Europe.
Taking such big steps could be hard because Wall Street is so powerful, and European banks might get backlash if they do business in America.
Still, some executives of the international bank said, they were worried about Europe backblast in the next few months.