Following President Donald Trump's announcement of a broad range of tariff measures, stakeholders are preparing for potential subsequent actions aimed at compelling trade partners to comply with U.S. mandates.

The United States, as a global financial hub and the issuer of the world's reserve currency, possesses several tools Trump might employ to apply pressure on other nations, ranging from credit cards to dollar provisions for foreign banks.

While the use of these unconventional measures may come at a significant cost to the U.S. itself and could lead to unintended consequences, observers have indicated that such alarming scenarios should not be dismissed.

This is particularly true if tariffs do not succeed in reducing the U.S. trade deficit with the rest of the world—a possibility recognized by many economists, especially given the near-full employment in the United States which has led to acute labor shortages.

In response to Trump’s tariffs, China has initiated countermeasures, contributing to further declines in American stock values and deepening the resulting economic crisis.

Barry Eichengreen, a professor of economics and political science at the University of California, Berkeley, noted, "I can easily imagine Mr. Trump...

feeling frustrated and attempting to implement bizarre ideas, even when they lack coherent logic."

The Trump administration's purported secret blueprint aims to rebalance trade by weakening the dollar.

One proposed method involves orchestrating a coordinated effort with foreign central banks to revalue their currencies.

According to a research paper prepared by Stephen Moore, Trump's nominee for the Chair of his Council of Economic Advisers, this could occur within an accord at Mar-a-Lago—referencing the 1985 Plaza Accord that capped the dollar and the President’s Florida resort.

The paper suggests that the U.S. might use the threat of tariffs and the allure of American security support to persuade nations to appreciate their currencies against the dollar as part of broader concessions.

However, economists exhibit skepticism regarding the acceptance of such an agreement in Europe or China, given the vastly different economic and political climate compared to four decades ago.

Maurice Obstfeld, a senior fellow at the Peterson Institute for International Economics, stated, "I think this scenario is highly improbable." He elaborated that tariffs have already been imposed, which negates their use as a threat, and that the U.S. commitment to global security has weakened due to its ambiguous stance on Ukraine.

Additionally, he remarked that it is unlikely that central bankers in the Eurozone, Japan, and the U.K. would acquiesce to a deal that compels them to raise interest rates and risk recession.

Should negotiations fail, the Trump administration may resort to more extreme measures, such as leveraging the dollar's status as a global currency for trade, savings, and investment.

Obstfeld, alongside various overseers and central bank governors, noted that this could manifest as a threat to halt Federal Reserve liquidity flowing to foreign central banks, which allows them to borrow dollars against collateral in their local currencies.

This liquidity is vital during financial crises when capital markets falter and investors flock to the dollar as a safe haven.

Withdrawing such liquidity would destabilize the trillions of dollars in dollar-dominated credit markets outside the U.S., particularly impacting banks in the U.K. and the Eurozone and Japan.

Importantly, these so-called swap lines remain under the Federal Reserve's purview, and Trump has not publicly referenced this tool.

Nonetheless, recent moves to replace key personnel, including within regulatory bodies, have raised concerns among observers.

Spiros Andreaopoulos, founder of the consulting firm Thanassis Macro Economics, stated that such actions "no longer render this an unlikely threat in broader negotiations."

The U.S. also holds a strategic advantage through its dominant payment services, specifically through credit card giants Visa and Mastercard.

Although Japan and China have developed varying degrees of proprietary electronic payment methods, these American companies process two-thirds of card payments in the Eurozone, which comprises 20 countries.

U.S. mobile payment applications, led by firms such as Apple and Google, account for nearly one-tenth of retail payments.

This shift has placed European entities in a defensive position within a market that surpassed €113 trillion (approximately $124.7 trillion) in the first half of last year.

Should Visa and Mastercard be forced to suspend their services—as occurred with Russia shortly after its invasion of Ukraine—European consumers could be compelled to revert to cash or cumbersome bank transfers for purchasing.

Maria Demertzis, chief economist for Europe at the Conference Board, characterized the U.S. pivot to aggression as a significant setback.

The European Central Bank has indicated that this could expose Europe to the risk of "economic coercion and pressure," suggesting that a digital euro might provide a remedy.

However, plans to launch this digital currency remain under consideration and could take years to materialize.

European officials are evaluating responses to Trump's actions, albeit with caution to avoid exacerbating tensions.

Potential measures could include imposing their own tariffs or pursuing stricter actions, such as limiting U.S. banks’ access to the European market.

Despite this, the implementation of such drastic steps could prove challenging due to Wall Street's international influence and the risk of a backlash against European banks operating within the U.S.

Nonetheless, some executives at international banks have voiced concerns regarding the risk of a strong retaliatory response from Europe in the coming months.