Last week, the Federal Trade Commission voted whether or not to fine companies that improperly use the “Made in the USA” tagline. The ruling got us thinking about labeling laws, and wanted to share a few guidelines.
“Made in the USA”: The Legalities
You can’t just slap a “Made in the USA” sticker on a product and call it a day. Rules apply. For example:
- FTC guidelines — outlined in a pamphlet entitled “Complying with the Made in the USA Standard” — states that to market something as “Made in the USA” it must be entirely or virtually manufactured in the United States.
- What qualifies as the United States for the purposes of “Made in the USA” labeling? Answer: All 50 states, the District of Columbia, in addition to U.S. territories (including places like the Northern Mariana Islands).
- According to past government guidance, for something to qualify as “Made in the USA,” “all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no — or negligible — foreign content.”
- To bear the tagline, final assembly of the product must occur in the United States. So-called “screwdriver assembly” does not meet the required benchmark.
Hypothetical Examples From FTC Guidelines
The Federal Trade Commission uses a grill and a lamp to outline “Made in the USA” standards. The agency’s guidelines explain: If a grill is substantially manufactured in the United States but uses minor knobs and tubes from China, the manufacturer can still use “Made in the USA.”
Conversely, a lamp with a foreign-manufactured base and a stateside-made shade wouldn’t qualify because the base is a substantial part of the product.
Alternative Option: “Assembled in the USA”
Another popular branding option is “Assembled in the USA,” which also comes with a set of qualifying standards. Companies cannot use it unless a product is “substantially transformed” in an American factory. Screwing two bolts into a product mostly assembled overseas doesn’t count.
“Made in the USA” Is Important
“Made in the USA” marketing matters. To start, it implies a high level of quality. It’s also emblematic of a cultural and political ideal. Some people feel very strongly about only supporting American companies, and “Made in the USA” labeling serves as their beacon.
The FTC’s “Made in America” Ruling
Recently, the Federal Trade Commission considered a block of cases wherein several companies’ inappropriately leveraged “Made in the USA” labels and hashtags. Ultimately, the commissioners found violations, but they couldn’t agree on punishments.
But the Federal Trade Commission answered the question last week when it voted not to fine businesses that violate “Made in the USA” marketing guidelines. Commissioners ruled that censure and increased reporting requirements would suffice.
The decision shocked many folks since it flies in the face of the current push to “buy American and hire American.”
The FTC’s chairman explained the impetus for the decision, theorizing that “the threat of significant penalties” has been “largely successful in keeping companies under order from making deceptive ‘Made in the U.S.A.’ claims.” He went on to cite limited resources as another reason for the FTC’s “strategic choice.”
Federal Labeling Laws in the United States
Other United States federal labeling laws include:
- The Textile Fiber Products Identification Act
- The Wool Products Labeling Act
- The American Automobile Labeling Act
Contact an E-commerce Lawyer with Questions
Traditionally, the Federal Trade Commission typically opens “Made in the USA” investigations when an egregious issue is brought to its attention. However, competitors can also sue for labeling law violations.
The best way to avoid an investigation and lawsuit is to consult with an advertising and marketing attorney before incorporating the tagline into promotional materials.
Wondering if you can safely use the “Made in the USA” tagline without censure? Get in touch today. We’ll review your situation and determine the appropriate labeling for your product.Contact an FTC Marketing Compliance Lawyer »