According to MMT, the interest paid on Treasuries is operationally unnecessary, since the US does not need to finance itself. Foreign holdings of Treasuries are the capital account offset of the current account deficit resulting from net imports, which constitute demand leakage and effectively export jobs. By paying interest on foreign holding of Treasuries by net exporters, the US is subsidizing export of US jobs.
Gagnon and Hufbauer explain how the US can counter this by using taxation as a disincentive to save in dollars, instead of resorting to tariffs. As net exporters lose their dollar subsidy, they will be less willing to save in dollars. This will reduce the capital account that must offset the current account. Therefore, to continue exporting to the US at the same rate, net exporting countries would have to balance their trade with the US by purchasing US goods in exchange instead of saving US dollars, or decrease the volume of exports to the US.