Avery Dennison Corp

Previous wording

Trade-related uncertainty remains elevated between the U.S. and other regions and countries, including Canada, Mexico, China, India and the European Union. In 2025, the U.S. implemented a 10% global baseline tariff rate on nearly all imports, with higher rates on certain goods. Additionally, it applied significant tariffs on goods from Canada, Mexico, China and the European Union, each of which announced reciprocal tariffs. The amount of these tariffs or the classes of goods on which they are applied continues to evolve and could significantly change. The U.S. government continues to negotiate with countries regarding the tariffs. In July 2025, the U.S. and the European Union agreed to a framework for a trade deal that included a baseline tariff rate of 15% on most goods imported from the European Union into the U.S. While the direct impacts on our operations after our mitigating actions have not been significant, our business could be materially adversely impacted by changes in U.S. and non-U.S. trade policies, including potential modifications to existing trade agreements and additional tariffs or other restrictions on free trade, impacting our raw materials or finished products. The indirect impact on demand for our products and solutions as a result of these events, which have resulted in softer consumer volumes, continues to be uncertain and elevated. We estimate that the indirect impact of tariffs resulted in an aggregate low single digit rate decrease in sales in our overall apparel categories over the second, third and fourth quarters of 2025. In February, 2026, the U.S. Supreme Court ruled that the applied tariffs were not authorized under the International Emergency Economic Powers Act. Beginning in the second quarter of 2026, the U.S. Customs Border and Protection began processing refunds related to certain unliquidated tariffs affected by this ruling. In June 2026, the U.S. Department of Justice filed an appeal in the U.S. Court of Appeals for the Federal Circuit asserting that the U.S. Court of International Trade overstepped by ordering refunds to non-litigants on liquidated entries. In July 2026, the U.S applied new tariffs of 10.0% and 12.5% on certain imports from 60 countries. Further developments in international trade relations, including ongoing developments on tariffs required by the U.S. or other countries, and increased deglobalization, could have a material adverse effect on our business.

Current wording

Trade-related uncertainty remains elevated between the U.S. and other regions and countries, including Canada, Mexico, China, India and the European Union. In 2025, the U.S. implemented a 10% global baseline tariff rate on nearly all imports, with higher rates on certain goods. Additionally, it applied significant tariffs on goods from Canada, Mexico, China and the European Union, each of which announced reciprocal tariffs. Tariff rates and the categories of goods to which they apply continue to evolve and could significantly change. The U.S. government continues to negotiate with countries regarding the tariffs. In July 2025, the U.S. and the European Union agreed to a framework for a trade deal that included a baseline tariff rate of 15% on most goods imported from the European Union into the U.S. While the direct impacts on our operations after our mitigating actions have not been significant, our business could be materially adversely impacted by changes in U.S. and non-U.S. trade policies, including potential modifications to existing trade agreements and additional tariffs or other restrictions on free trade, impacting our raw materials or finished products. The indirect impact on demand for our products and solutions as a result of these events, which have resulted in softer consumer volumes, continues to be uncertain and elevated. We estimate that the indirect impact of tariffs resulted in an aggregate low single digit rate decrease in sales in our overall apparel categories over the second, third and fourth quarters of 2025. In February 2026, the U.S. Supreme Court ruled that the applied tariffs were not authorized under the International Emergency Economic Powers Act. Beginning in the second quarter of 2026, the U.S. Customs and Border Protection began processing refunds related to certain unliquidated tariffs affected by this ruling. In June 2026, the U.S. Department of Justice filed an appeal in the U.S. Court of Appeals for the Federal Circuit asserting that the U.S. Court of International Trade overstepped by ordering refunds to non-litigants on liquidated entries. In July 2026, the U.S. applied new tariffs of 10.0% and 12.5% on certain imports from 60 countries. Beginning in August 2026, the U.S. and Canada implemented additional tariffs and counter-tariffs on certain imports ranging from 15% to 50%. Further developments in international trade relations, including ongoing developments on tariffs required by the U.S. or other countries, and increased deglobalization, could have a material adverse effect on our business.