How American Must A Product Be To Be Labeled “Made In The USA”?

This caribiner leash may have carried the "Truly Made in the USA" logo, but the truth is that it was an imported product.

The FTC says that not all E.K. Ekcessories products carrying the “Truly Made in the USA” logo met the agency’s guidelines for using that phrase.

As you finish up your holiday shopping this year, you might be feeling the desire to buy American-made products. Any number of things claim to be made in the USA, but that label itself is not an absolute guarantee that what you’re buying was indeed produced stateside.

While there are federal standards for what qualifies as “Made in America,” there is no vetting or certification process that goes on before that label can be applied.

So a company could slap a made-in-USA sticker on its products and hope it doesn’t get caught, much like E.K. Ekcessories, an outdoor accessories company that the FTC recently accused [PDF] of deceptively marketing its products with labels like “Truly Made In the USA,” and statements on its website that its products were made at the company’s facilities in Utah.

[UPDATE: In e-mails to Consumerist, E.K. Ekcessories clarifies that it never had any intention to deceive consumers and says only a small number of its components are imported and that all assembly in done in the United States. Though E.K. says it believes the guidelines determining what counts as “Made in U.S.A.” are too strict, the company claims to now be in full compliance with the FTC standards.]

That company has since settled with the FTC and agreed to stop falsely marketing its imported products as made in America, but who knows how many other products are out there just waiting to be caught in the same lie?

So what does it take to actually count as being made in the USA?

SLINGING LINGO
First off, there is no specific language that manufacturers must use. To the feds, statements like “Made in the USA” and “American-made” are effectively the same. They communicate to the consumer the notion that the product was produced within the 50 states, the District of Columbia, or in U.S. territories.

Additionally, the made in America claim doesn’t need to be explicit. The FTC gives the following example:

A company promotes its product in an ad that features a manager describing the “true American quality” of the work produced at the company’s American factory. Although there is no express representation that the company’s product is made in the U.S., the overall — or net — impression the ad is likely to convey to consumers is that the product is of U.S. origin.

References to America in a product or brand’s name is a slightly trickier affair. For instance, the FTC likely won’t go after a product called USA Joysticks even if said joysticks are made in Vietnam, but if that same product were to be called “Made In USA Joysticks,” then it would likely have to fall into the made-in-USA guidelines.

VIRTUALLY ALL-AMERICAN
Those guidelines require that a product carrying a “Made in USA” marketing claim with no immediate and clear qualifications must be “all or virtually all” made in the U.S. or its territories.

The FTC takes “all or virtually all” to mean that all significant parts and processing that go into the product must be of U.S. origin. Any foreign supplied parts or ingredients should be negligible.

It gives two examples to show how it determines whether foreign parts constitute a negligible portion of the end product. The first example is a gas grill that is assembled in the USA and whose only foreign-made parts are some tubing and the knobs for controlling the flame. In this case, the FTC says that the knobs and tubing are insubstantial enough and a Made In USA claim would be okay.

The second example is a Tiffany-style lamp where everything but the base of the lamp is supplied by U.S. companies. To the FTC, the base is too integral and substantial a portion of the end product, and so an unqualified Made In USA claim would not hold up to scrutiny.

FOREIGN RESOURCES
Then there is the question of where the raw materials for various components came from. Again, this depends on how much of the end product is made up of those raw materials. A computer that has some parts which contain imported metal would likely pass muster, but a wrench made mostly out of imported metal would probably not. This does not necessarily hold true for clothing with the Made In USA label (see below).

For products that are assembled in the U.S. from a mix of foreign and domestic parts, manufacturers may make qualified marketing claims like “Made in USA of U.S. and imported parts,” “Assembled in the USA from Italian leather and Mexican wood,” or “60% U.S. Content.”

However, the FTC advises companies to tread lightly when making these kinds of qualified claims, as they still imply to consumers that a large portion of the manufacturing was done stateside.

A GUY WITH A SCREWDRIVER IS NOT A MANUFACTURING PLANT
The Commission warns against using the “Assembled in USA” claim for products where the only assembly done in America is what the FTC refers to as “screwdriver” assembly. That’s when all the major parts are already put together elsewhere then shipped to the U.S. to be quickly put together. Basically, if the work being done is no more complicated than putting together some IKEA shelves, it probably doesn’t qualify as “Assembled in America.”

CAR COMPONENTS
One industry that has been prolific in touting “American made” claims is the automobile industry. The American Automobile Labeling Act requires that each vehicle manufactured for sale in the U.S. bear a label disclosing where the car was assembled, the percentage of equipment that originated in the U.S. and Canada, and the country of origin of the engine and transmission.

Even with these additional requirements, any automaker or clothing company making a “made in America” claim in its advertising would be held to the same criteria as other products.

THE CLOTHES ON YOUR BACK
The Textile Fiber Products Identification Act and Wool Products Labeling Act actually requires Made in USA labels on most clothing and other textile or wool household products if the final product is manufactured in the U.S. of fabric that is manufactured in the U.S., regardless of the country of origin of materials earlier in the manufacturing process. So an all-wool sweater may be made from wool that was grown entirely on another continent, but as long as the sweater itself is wholly made in the U.S., it gets the Made in USA label.

Textile or wool products that are partially manufactured in the U.S. and partially manufactured abroad must be labeled to show both foreign and domestic processing.

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  1. Naskarrkid says:

    I think the company should have their main headquarters in the U.S., and the product should be at 80% (if not more) made in the U.S. It’s too simple, so it wouldn’t work.

    • MathManv2point0 says:

      80% of the raw materials made? 80% of the labor to get the raw materials? 80% of the components made by the raw materials? 80% of the labor used to make the components? 80% of the mass of the product? 80% of the volume of the product? 80% of the number of utilizable features of the product? 80% of the mass of the utilizable features? ????
      Yes, I am intentionally trying to be a wisea…

    • furiousd says:

      You of course would have to qualify what you mean by ‘main headquarters’, a certain percentage of non-factory workers at a given location within US borders? You could spin off a company to outsource your marketing, quality control, accounting, etc. Simplest way to encourage businesses not to outsource it to not penalize them for remaining in the US.

      For many products, I wouldn’t consider buying American (cars, electronics, and the like). And from my experience living abroad in many countries I think in general we need to move away from the false concept that something is inherently better because it came from America (or wherever you’re from) and recognize that some places, companies, etc. just do a better job. Instead of looking for an American flag label, for instance, I turned to Consumer Reports to see who makes the best blender.

      If America just can’t compete in manufacturing, then maybe it should focus on what it does do well: various forms of research, corporate leadership, certain manufacturing, etc. If we as a nation focused on what we did best and outsourced what we can’t do well or at least as well as someone else, and all traded together, wouldn’t we be better off? Think of it like a surgeon who hires someone else to do his landscaping, or plumbing, or fix his television. Certainly there are complications when you involve international politics, but if the general premise is followed…

      • MathManv2point0 says:

        I really like your point about America focusing on what it does well.

        However, I feel simply outsourcing something because someone does it better is not the best solution.

        The more you outsource (assuming everything else stays the same) the more $ is flowing out of the US. This outflow can shift the Balance of Payments against the US (meaning we owe more to the world than the world owes to us).

        Why is that bad? Well… on a simple level, if I as an individual have more debt than receivables and go to a bank to get a loan, I will most likely be charged a higher interst rate than someone with less debt than assets.

        When Uncle Sam wants to issue new debt (in the form of US Treasuries) to the rest of the world (or even banks here in the US), the rest of the world will charger a higher interest rate if they believe the US is more risky. It gets more and more expensive just for the US to operate as the world begins to charge us more and more just to do business with them. The same happens to US companies when issuing debt.

        What’s a potential “solution”?
        More exports than imports.

        Now, if I knew what we could do as a country to create (in house) more products/services the rest of the world wants then I have a platform to make us stronger as a country.

        furiousd, got any specifics? I think we’re on to something….

        • MathManv2point0 says:

          Couldn’t edit for some reason but wanted to add to the “solution” less government spending and borrowing…

          • furiousd says:

            There’s definitely something to that, and if countries start working together better there shouldn’t need to be so much competition. For instance, if we talked to Canada and said we’d trade not charging tax on imported maple syrup for their not charging tax on… pft, what do we make that Canada wants? Washington State apples? Idaho potatoes? And then continued being nicer to each other. Ease up taxation on the Georgia tree harvest used to make chopsticks in exchange for China forgiving some of the debt we owe them….

        • furiousd says:

          This article came up and I thought was a good case in point of a global supply chain for something amazing: http://consumerist.com/2013/12/11/how-many-countries-does-it-take-to-produce-a-single-jar-of-nutella/

          That is an interesting point, certainly not everything the US does well is needed by every country. And not everything is feasible to be outsourced, think electric distribution, water treatment, and the like. I had a coworker from India (I work in a research lab where there’s a lot of people from all over the world I collaborate with) who said something once about people from different places in the world: that Americans were great at getting the big picture right, but that in general we weren’t the best at the pieces of the puzzle; the Chinese students were generally phenomenal at math with no vision of the big picture; the Indian students did fine on whatever you gave them as long as you set clear boundaries including a deadline; the Germans did a great job on pieces that they liked and didn’t work well with a deadline. Something to that effect, I don’t recall his exact words.

          I don’t have any firm solutions, but it’s like getting lost in the woods: pick the direction most likely to get you where you need to go and start walking (streams, the setting sun, a tree), update your plan based on new information but don’t just wander in a circle.

  2. SuperSpeedBump says:

    One thing that irritates me about the Made in the USA stuff is when people assume that just because a few products from a manufacturer are made in the US means that all of their products are. Carhartt is a good example of this. Right now only 6 items in their entire catalog are Made in the US, yet most of the people that wear their stuff seem to think all of their stuff is made in the US. (I do customer service for a workwear store, so I hear this a LOT)