Companies that can’t back up may claim that their products are made in the US.
Revealed: Meaning “made in America”
George and Lisa Winton of Swanney, Georgia, discuss the foundations of the Winton Machine Company and the meaning of “made in America.”
Research shows that Americans love American-made products. The problem is that the “Made in USA” tag is not always accurate.
The Federal Trade Commission has cracked down on marketing that is false or unfounded about such claims in recent years, forcing some companies to pay millions of dollars to misleading consumers.
That crackdown continues in July, with the FTC being called “Made in the USA” month. On July 8, the agency sent warning letters to four companies, reminding them to comply with labeling requirements. Amazon and Walmart also received letters about third-party sellers that appear to be making deceptive claims.
“Consumers are confident that when they buy something labeled “Made in the Usa,” they are actually supporting American workers and the US economy,” FTC Chairman Andrew Ferguson said in a July press release. “Companies that incorrectly claim that their products are “made in the US” can expect to hear from the FTC. ”
What does “Made in USA” mean?
The FTC says companies must advertise “all or virtually everything” of their US products as “made in America.”
This means that, according to the FTC website, the final assembly or processing will take place in the United States, or all “critical” processing with “all or substantially all” components created and sourced in the United States.
According to Kathleen Benway, a partner at the law firm Alston and Bird and a former staff member of FTC’s Consumer Protection Agency, this is a “flexible measure” that takes into account the amount of production costs of a product and how important foreign input to the form or function of the final product is. She says it can be difficult to determine whether a product is truly made in the US, and is often determined on a case-by-case basis.
Companies that mislabel their products can face heavy fines from FTCs.
In 2023, the instant brand that manufactures Pyrex-Brand kitchens and home products was ordered to pay a $129,416 fine after FTC said it had mistakenly claimed that a Chinese-made product sold on Amazon was “made in the US.”
More recently, in 2024, home product company Williams-Sonoma was charged with a civil penalty of $3.2 million after saying the FTC listed multiple products made in China and other countries as being made in the United States.
Many similar cases have come from agencies completing the Made in USA Labeling rules in August 2021. This allows FTC to impose civil penalties on businesses that are not compliant.
Benway hopes that the FTC will continue to pursue similar cases. Especially because they are consistent with the Trump administration’s efforts to bring more manufacturing back to the US.
“The false or misleading claim that it was made in America has long been the focus of the FTC. So this is not necessarily new. They were Beat police officers for a very long time,” Benway said. But “I am confident that this is a priority for the Ferguson-led FTC.”
Do Americans prefer products made in the US?
The “Made in USA” label is an attractive selling point for consumers.
About three-quarters of US consumers say they prefer American-made products, particularly in the aftermath of supply chain disruptions during the Covid-19 era, according to a May report from Integris, an IT service provider that works with manufacturers across the country.
“There may be some patriotism associated with that, but there is also the perception that the product may be greener because it travels shorter distances from the factory to the shelf or because it is of high quality,” says Phyllis Marcus, vice president of national advertising at BBB National Programs.
The extent to which preferences affect spending is another matter. Almost two-thirds of consumers said factors such as quality and price weighed more factors in their purchase decisions, according to Integris.
Overall, the Commerce Department estimates that as of 2023, about half of what Americans bought was “made in the US.” This includes purchasing from consumers, businesses and governments.
However, Benway warned that it would be difficult for consumers to communicate deceptive marketing from legitimate “US” products.
“To some extent, they are at the mercy of the marketers,” she said. “That’s why it’s important for the FTC to continue enforcement action and provide guidance to businesses.”
One sign that shoppers can be careful about is labels that mark imported “made in the US” products. In that case, Benway said consumers should file a complaint with the FTC.
