If demand for USD denominated debt drops that puts downward pressure on the USD. That can be good and bad for the economy, but it can cause all imports to go up

If demand for USD denominated debt drops that puts downward pressure on the USD. That can be good and bad for the economy, but it can cause all imports to go up, essentially importing inflation into the US economy. If that's a problem then the Fed can raise interest rates (or just stand by while they go up), but it can also make the USD it has on its balance sheet disappear, which is deflationary. Quantitative tightening is also a thing. You've got to keep in mind that the people who are buying or holding these bonds are the ones who will get burned, so they're not going to suddenly dump their USD holdings at great expense. The Chinese I'm sure would love to strike at the USD but they're holding trillions of it, so they would mostly be hurting themselves. So if it happens it will be relatively gradual and the Fed and the market will do its thing.