The Federal Trade Commission's "Made in USA" standard is set forth in its Enforcement Policy Statement on U.S. Origin Claims and is also codified in the FTC's recently-promulgated Made in USA Labeling Rule. Essentially, if you want to make an unqualified claim that a product is made in the United States, you have to be able to substantiate that the product was "all or virtually all" made here. And, according to the FTC, you'll never be able to demonstrate that unless the product was last "substantially transformed" in the United States as well.
Almost every month, the FTC wraps up investigations into U.S.-origin claims made by marketers.
Sometimes, the FTC takes enforcement action, such as in the FTC's recent case against a group of clothing accessory companies who allegedly falsely claimed that their products were made in the United States, even though they were either wholly imported or contained significant imported content. As part of the settlement, the marketer agreed to pay more than $190,000 and to send written notices to their customers informing them that the FTC had charged them with making false "Made in USA" claims.
More often, however, the FTC informally concludes investigations by issuing closing letters that highlight its concerns about specific U.S.-origin claims that marketers have made and that describe the remedial action that the marketers have taken as a result of the FTC's inquiry. Here's a quick summary of the two most recent "Made in USA" investigations that the FTC has concluded.
Auto Parts
In late August, the FTC closed an investigation into U.S.-origin claims made by Ramcoa about certain bushings and other auto parts. (Apparently, "bushings" are metal linings.) The FTC expressed a concern that the company promoted some of its products as being made here, even though they were actually imported.
While the FTC's closing letter doesn't get into much detail about the specifics of what happened here, one of the important issues that the FTC's highlighted was the concern that companies should avoid making generalized U.S.-origin claims about their brands without specifying which products the claims apply to. The FTC explained, "consumers generally interpret U.S.-origin claims in marketing materials to cover all products advertised in those materials."
Toys
Earlier in August, the FTC closed an investigation into U.S. origin claims made by Levlovs about the toys that it sells. The FTC expressed the concern the company included "Made in USA" claims on the packaging for the toys, even though the toys weren't, in fact, made here.
An important point that the FTC raises in its closing letter is that advertisers should never make an unqualified U.S.-origin claim if U.S. customs rules require the product to be marked as being imported. The FTC explained, "marketers should not make U.S.-origin claims for products [U.S. Customs and Border Protection] requires to be marked with a foreign country of origin."
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"Consumers generally interpret U.S.-origin claims in marketing materials to cover all products advertised in those materials."
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