Have you ever bought a product because it said “Made in USA”? I have, because I believe in buying local. Because I hoped that my money would go towards creating jobs and help businesses grow, creating local economies that are largely self-supporting. I looked at the label that boldly stated that it was manufactured in this country and I trusted the company. Ah, the innocence! Little did I know that claiming to be “Made in USA” is a territory marked with loopholes, misinformation, ambiguous labeling and outright lies. “All-American” goods like Converse sneakers and Levi’s jeans are made overseas. Good old American cars are from Mexico. Coors is equal part Canadian, Brazilian and South African as it is American. New Balance is in hot water with the Federal Trade Commission (FTC), the advertising watchdog, for making “American Made” claims, as was Craftsman. The list is long and saddening.
Given that 61% of Americans, in a survey by Adweek Media and Harris Interactive, say that they would choose to buy a locally manufactured product, one would expect stricter, more uniform standards. Unfortunately, the process of making such a claim is anything but simple. Here is a quick and dirty guide for businesses that would like to proudly proclaim that their products are “Made in USA”.
The Choice is Yours: First off, it is important to know that, except in certain cases, making the “American Made” claim is voluntary. You don’t require per-approval from the FTC and as with most advertising, the company can say so, as long as it is truthful and substantiated. Before making the claim , it is important to dig deep into the supply chain. You may take your supplier’s All-American claim in good faith, however you are better protected if you ask for proof and keep records. (Note: Labeling is mandatory for automobiles, textiles, wool and fur products.)
All or Virtually All: The most contested clause is the “all or virtually all” method of verification. The FTC states that your product must be almost entirely made of nationally sourced material and labor with negligible foreign content. A number of factors are assessed to verify a claim. The FTC considers how much of the product’s total manufacturing costs can be assigned to U.S. parts and processing, and how far removed any foreign content is from the finished product. They consider if the product’s final assembly or processing took place in the U.S. “All or virtually all” is, understandably, a very vague definition and leaves room for interpretation. One quick rule of thumb, foreign content used early in the manufacturing process often will be less significant to consumers than content that is a direct part of the finished product.
Qualified or Unqualified:Making a claim that only a part of the product is American Made is considered to be a “qualified” claim. For example, a dresser that is 70% American or a shoe manufactured in the US with Italian leather, would fall under this category. This type of labeling is suited for products that cannot make an “unqualified claim”, reserved for the “all or virtually all” category of products. As with unqualified statements, qualified claims require that the manufacturer maintain appropriate records. Also, consider this category only if a significant portion of the product is made Stateside. No one will be impressed if 5% of the content is American.
Overt, Covert and Everything in Between: Either your product is American or it isn’t. If it isn’t, be wary of using symbols, such as the flag or the Statue of Liberty, in place of overt claims on labels and packaging. This holds true of messages in advertising as well, such as, an ad showing American workers making the product. The FTC frowns upon this and is likely to consider this as an “implied claim”. Why be sneaky about it?
“Screwdriver Assembly” Doesn’t Count: You cannot simply attached parts together Stateside and claim your product is locally made. If your business wants to make an “Assembled in USA” claim, the FTC requires that your product have undergone “substantial transformation” on American soil. This is a murky area though (even the FTC gives some debatable examples), so tread cautiously.
Multiple Watchdogs: Customs has the authority to administer the requirement that imported goods be marked with a foreign country-of-origin label. If a product is not required by Customs to use a label of origin, it does not automatically mean that a “Made in USA” claim can be made. Also, FTC has jurisdiction over advertising and other promotional material. A hall pass issued by Customs only goes so far.
Know Your Labels: There is no one official or universally recognizable label for proclaiming that your product is American made. Made in USA Brand claims to be the only mark registered with the US Patents Office. Made in USA Certified offers an independent third-party audit and use of their registered logo. Many companies also use their own designs. This is confusing for customers and hopefully some standardization will occur in the near future. Until that happens, use clear, easy-to-spot logos with the text “Made in USA” prominently displayed. You have every right to be proud!
For more information, visit the Federal Trade Commission’s Bureau of Consumer Protection.