The implication, he explained, is that it provides room to reopen discussions and defend earlier positions rather than simply absorb unilateral tariff decisions. It only reduces downside risk rather than creating upside opportunity.
According to Baig, the most important impact of the ruling is institutional. The decision constrains the ability of the US administration to abruptly deploy tariffs as a negotiating weapon. As he put it, “you can’t really do diplomacy, and tariffs conflated together over a tweet anymore,” and the avenue for imposing sweeping duties — “30, 50, 60%” style tariffs — has effectively closed.
Sector-specific tariffs in areas such as semiconductors or pharmaceuticals may still appear, but they will move through investigations and legal processes and can be challenged. In his words, the earlier “willy-nilly approach to tariff diplomacy… is behind us.” For India and other exporters, the risk has therefore changed in nature: not eliminated, but moderated.
Also Read: India-US trade deal may need review after US SC tariff ruling, says Kanwal Sibal
Baig also connected the tariff outlook to currency markets. Lower tariff pressure reduces inflation impulses in the United States and influences interest-rate expectations, which in turn affects the dollar. Bond and foreign-exchange markets, he noted, are conflicted — fewer tariffs imply softer inflation and flatter yield curves, yet reduced tariff revenue worsens fiscal balances and could push long-term yields higher. Despite the cross-currents, his broader macro view remains that the dollar faces structural headwinds. He maintained that the “short dollar narrative remains alive,” a backdrop that typically supports emerging-market currencies, including the rupee.
Also Read: FII inflows into India since US trade deal top $2 bn, worst of rupee’s fall behind us: Goldman Sachs
Even so, Baig does not see a return to normal trade relations soon. Instead, the trade conflict is evolving rather than ending. The United States may attempt tariffs through investigations, sector-specific measures or balance-of-payments arguments, but each route faces legal scrutiny and implementation hurdles. As a result, markets are struggling to judge whether the developments are materially positive or merely procedural, which explains the muted reaction across bonds, currencies and equities.
For the entire interview, watch the accompanying video
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