Goods and services that are truly “Made in the USA” are in high demand, and with good reason: they tend to be of high quality, sustainably produced, and the companies that make them return their income to the local economy. Today we’re going to talk about what makes the term “Made in the USA” special and how you can differentiate the real deal from the pretenders!

“Made in the USA”

The phrase “Made in the USA” sounds simple enough, yet there are a great many details associated with it. In order for any particular product to “earn” this moniker, it has to be made within the United States' borders (or territories) from "all or virtually all" American components, with the components themselves sourced in the US.

While “all or virtually all” has a meaning according to the FTC (“all significant parts and processing that go into the product must be of US origin”), there is some room for interpretation in this phrase, since different people might define what makes a part “significant” differently, which could lead to confusion. Another confounding issue is that, under U.S. laws and regulations, any product that experiences a “substantial transformation” in the United States does not have to have its country of origin indicated in its marketing. However, this protection disappears if the company makes a claim that the product was made in America, which has some very strict rules that we will now explore.

There are two main ways a company may try to convey to customers that its products are American: first, they can do so with an “express claim” with clear-cut terminology like “Made in USA; second, they can instead make an “implied claim”, where they will use American imagery (like American flags, or elements of stars and red/white bars) and terminology (“patriotic”, “united we stand”) to try to convey to customers that their product is American in origin. No matter which approach they choose to take, they are still required to meet the rules for “Made in America” labeling outlined above, and the Federal Trade Commission (FTC) is empowered to investigate and enforce the related laws in cases where there are doubts as to the veracity of a company’s American-made claims.

The most important questions the FTC considers in determining whether a product ought to be allowed to make an “unqualified claim” (in other words, the simple and pure statement that a product is American-made) and wear the “Made in America” label are:

1. Did the final assembly/processing of the product occur in the U.S.? If not, it can’t earn the term, and must call out the fact that it was assembled elsewhere on its tags.

2. What percentage of the total cost of making the product belongs to U.S. costs versus foreign costs? While there is no explicit percentage that makes a product qualified or disqualified, this is an important factor in determining whether the company has made an appropriate claim on its labels.

3. How much of a transformation took place between the foreign material and the final product? If the transformation is substantial (say, foreign rubber that gets used as an element of sporting equipment), then it will make the product more likely to qualify for the illustrious title of Made in the USA.

The Devil is in the Details

For a manufacturer that knows their product does not meet these lofty standards but was still assembled or finished in the U.S., they have the option to make a “qualified claim”, which is another way of saying that the company can mention the U.S. so long as they are very open about which materials came from where, where the manufacturing and assembly were done, and other factors. For example, if imported materials were used to make it in the USA, it could have the qualified label “Made in USA with imported parts”. Percentages may also be specified, as in “70% U.S. content”. Regardless of what claims the company wants to make, they must be able to back those claims up if challenged on them.

If all that sounds complicated as-is, you will be amazed to know that there are even more rules for specific categories of certain goods. Clothing, textiles, and certain materials are actually required to display the “Made in USA” label so long as the fabric was made and the article itself was cut and sewn in this country (even if the fiber was grown/shorn elsewhere) thanks to the Textile Fiber Products Identification Act. Dealing with wool? Now you will also need to abide by the Wool Products Labeling Act, which requires all wool products to be labeled with the fiber’s content and its country of origin (thankfully, the United States makes much of its own wool, as you can read about in our most recent blog post!). Even fur must be labeled by animal, country of origin, and manufacturer. While these complex statutes can present a significant hurdle to companies trying to avoid running afoul of the many relevant laws, it is worth bearing in mind that these laws exist to protect American consumers from false advertising and empower companies acting in good faith to proudly display their product’s origins.

Government Buyers

The rules for when the federal government buys goods are oddly different from the details discussed above. The U.S. government must buy only American-made goods unless it has no choice but to purchase foreign wares, which was first codified in the Buy American Act in 1933. This act explicitly stated that at least 50% of a product’s parts must be U.S. parts to be considered American-made, which is quite different from the FTC requirements to earn the “Made in America” label for goods sold to private citizens. While this “Buy American” policy was loosely enforced for many years, it was strengthened in early 2021 by an executive order that directed federal agencies to redouble their efforts to buy only American, and required that waivers and exceptions to the policy be granted only by agency leadership to avoid waiver overuse.

“Assembled in America”

The “Assembled in America” term has been frequently used to circumvent the fact that the materials involved in a given product’s manufacture are of foreign origin, though this has been challenged by the FTC since their recent policy enhancements. They have frequently required companies to clarify their “Assembled in America” claims by adding the national source of the materials or parts used (i.e. “Made in the USA with global materials”). Still, this term remains widespread, and is permitted so long as a good’s principal assembly takes place in the United States and the assembly performed meets the previously mentioned standard of “substantial transformation”.

Unscrupulous Claims and Spotting Fakes

Now that you know the ways good companies follow the regulations to ensure consumers know who they should buy from, let’s highlight a few ways to identify (and one way to avoid identifying) products that might not be being truthful in their “Made in America” claims:

1. The product has an American flag on it, yet is missing explicit statements of where it is made or where its materials are from.

2. The product was sold on a foreign website, or is being sold as a third-party product on an American website.

3. The product’s packaging or its advertising has obvious grammatical/spelling errors.

4. The product is unusually cheap for an American-made good.

5. While bar codes can indicate the country of original of the bar code itself, they are not helpful in determining where the product in question was made, so avoid relying on them in this way.

Playing Fair at the Studio

Our discussion of labeling wouldn’t be complete without mentioning how committed we are here at Edgington Studio to the “Made in the USA” movement. Whenever possible, we recommend and use fabrics manufactured or printed (courtesy of Spoonflower, based in North Carolina right here in the United States) and labor sourced locally in Wheeling, West Virginia to make our clothing. If you have your own ideas for an American-made line of clothing, we would love to hear more about it and see if we can help design and produce it for you at the Studio. Remember: if you can see the value in producing high-quality sewn goods domestically and sustainably, your customers will too! While this is not an all-encompassing break down of labeling requirements in the USA, we hope it gives you a place to start as you research what rules and regulations apply to your next project.

References:

https://www.ftc.gov/system/files/documents/plain-language/bus03-complying-made-usa-standard.pdf

https://www.madeinamerica.com/made-in-usa-2/

https://sgrlaw.com/when-is-it-okay-to-label-my-product-as-made-in-usa/