Amid continuously changing tariff policies, companies need to keep up with policy developments while ensuring their decisions have a long-term perspective. Jim Kelly, CFO of chemical and industrial products supplier Orbia, said during a July 9 online event co-hosted by CFO Dive and ESG Dive titled "The Business of Risk: Navigating Policy and Compliance Turmoil": "Governments change, policies change, and these are long-term decisions." Kelly joined IMAX Treasurer Natasha Fernandes in a panel discussion focused on supply chain risk.

Weighing risks: Long-term perspective and scenario planning

For companies considering expanding manufacturing facilities or plants in the U.S., Kelly cautioned that such projects require years of planning, construction, and engineering, and by the time a new plant comes online, "we could be in a new administration, and these tariffs could be gone." Kelly has held the top finance role at Orbia for four years.

The "Business of Risk" event, held on July 9, aimed to explore how CFOs and other executives navigate policy and compliance turmoil in an uncertain environment. U.S. tariff policy continues to change rapidly, further clouding an already complex risk landscape. Within a week after the event, President Donald Trump pushed new developments in his ongoing trade war with major trading partners such as China, Canada, and Mexico.

IMAX's Fernandes noted during the discussion that CFOs play a key role in helping companies manage such risks—monitoring supply chain changes has always been part of the job. However, the current environment is prompting companies to place greater emphasis on cross-border risk hedging and to invest more time in scenario modeling. IMAX, headquartered in Mississauga, Canada, provides screens, film formats, and projection equipment to theaters, and is navigating tariff volatility through rigorous scenario planning to ensure a clear grasp of current risks and act accordingly. Fernandes has been with IMAX for 17 years and became CFO in 2022.

Orbia's response strategy: Flexible tracking and long-term positioning

Kelly also emphasized the importance of scenario planning. In fact, the chemical company had already initiated scenario planning with tariff policy as a discussion topic before Trump was elected to a second term. Kelly told CFO Dive in January that the Mexico-based industrial products manufacturer felt "well prepared" for policy changes, noting that companies should adopt a flexible approach to adapt promptly to evolving rules.

Kelly said during the discussion that compared with January, the current tariff environment may be "somewhat less volatile," but "changes are still very frequent," making continuous tracking essential. Orbia's supply chain spans multiple global markets, with commercial operations in 100 countries and manufacturing in about 50 countries.

Kelly noted that because Orbia's cross-border trade flows mainly between the U.S. and Mexico and is protected by the U.S.-Mexico-Canada Agreement (USMCA), it has "not been significantly affected by U.S. tariff policy" so far. However, the agreement could face revisions; Orbia is closely monitoring whether the Trump administration will pressure Mexico to impose tariffs on China and is planning accordingly.

Nevertheless, Orbia continues to approach tariff risk with a long-term perspective and has not substantially considered nearshoring more operations to the U.S. Instead, the company is taking steps to limit exposure, such as forming a 50/50 joint venture with OxyChem to produce ethylene, as Kelly cited as an example.

The China scenario: Sourcing trade-offs for 3D glasses

IMAX, which also has a vast global footprint, focuses on cost, long-term returns, and risk mitigation when addressing tariff risks. Fernandes said the goal is to "buffer" the impact, and IMAX is seeking second suppliers and evaluating how policy changes affect overall project economics.

However, sometimes the best option may be to maintain the status quo. For example, the company sources most of its 3D glasses from China, and despite opportunities to source from other regions, Fernandes said: "I think part of the risk assessment is, even if you source from elsewhere, is the price really better than continuing to source from China and bearing the tariff risk?" She added: "Moving to a non-tariff country is not always the immediate answer because the total cost may still be higher."

External communication: Transparency and short-term focus

Both Fernandes and Kelly emphasized the importance of clear, decisive external communication with investors and the market regarding the material impacts that tariff policies may bring.

Fernandes said IMAX maintains a "fairly short-term" perspective in its messaging because "the reality is we are in an era where tariffs change month to month." She noted that inventory and tariff risks can have a significant impact on the company's finances, making effective management and communication of these risks essential.

For Orbia, Kelly said the company has widened its guidance range "slightly more than usual" to transparently present the potential impact of tariffs.