Several prominent companies, including Apple, Toyota, Corning, and GE, recently announced plans to invest in or expand manufacturing operations in the United States (“US”). As manufacturing relocations increase and costs continue to rise, consumers may look to domestically produced goods to stretch their budgets. Companies either moving manufacturing to the US or already engaging in domestic manufacturing may want to capitalize on this demand and incorporate “Made in the USA” claims into their marketing strategies. While companies and their marketing agencies may be eager to make these claims, navigating the legal requirements for making “Made in the USA” may not be as simple.
What Businesses Need to Know
Certain US laws (e.g., for automobile, textile, wool, and fur products) require disclosure of the amount of US content in those products. However, for most other products, there is no mandatory requirement to include a “Made in the USA” label or otherwise disclose US content. Still, if a company voluntarily uses language or imagery implying US origin on product labels, in advertising (including email or digital/social media campaigns), or other promotional materials, those claims must align meet the FTC’s strict requirements as discussed in its Enforcement Policy Statement on US Origin Claims (“Made in the USA Policy Statement”) or as required by its Made in the USA Labeling Rule.
Made in USA Claims
“Made in the USA” claims can be express or implied. Examples of express claims include:
- Made in USA
- Our products are American-made
- USA
- Manufactured in the USA or
- Built in USA
Implied claims may be less obvious, and the FTC will focus on what the overall impression of the advertising, label, or promotional material conveys to consumers. Depending on the context, US symbols or geographic references (for example, US flags, outlines of US maps, or references to US locations of headquarters or factories) may convey a claim of US origin either by themselves, or in conjunction with other phrases or images.
Under the FTC’s guidance, it is an unfair or deceptive act or practice to label any product in the United States “unless the final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and all or virtually all ingredients or components of the product are made and sourced in the United States. As discussed below, advertisers making an “unqualified” “Made in the USA” claim must meet the “all or virtually all” standard before labeling a product or using the unqualified claim in advertising or promotional materials. When a product is unlikely to meet the “all or virtually all” standard, an advertiser may consider making a “qualified” “Made in the USA” claim.
Unqualified “Made in the USA” Claims
An unqualified “Made in the USA” claim must meet the “all or virtually all” standard to be a stand-alone claim without qualification or disclosure. When evaluating an advertiser’s claims to determine if this standard is met, the FTC examines:
- Where the product’s final assembly or processing took place.
- The proportion of US manufacturing costs compared to total manufacturing costs.
- How far removed any foreign content is from the finished product (i.e., whether foreign-sourced components are significant to the product’s function).
If, for example, a watch depends on Swiss movements to function, it is unlikely the watch can bear a “Made in the USA” label—even if many other parts are US-made.
Qualified “Made in the USA” Claims
If a product does not meet the “all or virtually all” threshold, a company may opt for a qualified “Made in USA” claim. Qualified claims clearly disclose the limits of US origin, such as “Manufactured in the United States with French imported parts” or “Assembled in the United States using Japanese parts.” These disclosures:
- Must be clear and prominent
- Should be placed near the claim
- Must be legible and noticeable to consumers
Qualified claims help marketers truthfully describe US processes or components without misleading consumers into believing the entire product is of US origin.
Comparative Claims
Marketers often compare their products or services to competitors. Comparative claims, such as “contains more US content than [competitor],” are permitted provided they are truthful and substantiated. The basis for comparison should be clear (e.g., “compared to other leading brands”). If a competitor believes a comparative claim is misleading, it may challenge the claim by:
- Sending an informal cease-and-desist letter
- Having the claim reviewed by the National Advertising Division (NAD) of the Better Business Bureau or
- Filing a federal lawsuit under the Lanham Act in more extreme cases.
FTC Enforcement
The FTC actively pursues companies it believes are making false, misleading, or unsubstantiated “Made in USA” claims. For example, in 2020, Williams-Sonoma faced an FTC action after allegedly mislabeling products for several of its brands, including Pottery Barn Teen, as “Made in USA” despite the products being fully imported or containing significant amounts of imported materials. Despite having previously received a closing letter from the FTC on a similar issue, Williams-Sonoma continued using unsubstantiated “Made in the USA” claims, prompting a more aggressive FTC response. The company ultimately paid $1 million and entered into a consent decree prohibiting it from making unqualified US-origin claims. This underscores the FTC’s willingness to impose substantial penalties, especially for repeat offenders.
Key Takeaways for Businesses
- Phase Your Claims: As you transition manufacturing operations to the United States, start with qualified claims (e.g., “Moving manufacturing to the USA,” “Made with 60% US parts”) and only switch to an unqualified “Made in the USA” claim once you meet the “all or virtually all” standard.
- Avoid Unintended Implied Claims: Carefully consider if your claims somehow convey that the product is “all or virtually all” of US origin. Consider avoiding the use of US imagery (flags, maps) unless you can substantiate them or appropriately qualify your claims.
- Map Your Supply Chain: Document every supplier and location thoroughly. Identify which components will eventually be sourced domestically and which, if any, must remain foreign-sourced.
- Substantiate Early: Build a record of your product line analyses—especially noting which foreign components are essential to functionality—and track how much of the manufacturing cost is attributable to US operations.
- Industry- and State-Specific Compliance: Stay informed about special rules for specific industries (e.g., textiles, wool, fur, and automobiles under the American Automobile Labeling Act) and any relevant state regulations.
Organizations should implement a robust legal review process for their advertising materials, especially those with US Origin claims, stay informed about legal developments, and be prepared to show substantiation for their advertising claims.
The CommLaw Group Can Help!
The CommLaw Group specializes in helping businesses navigate complex advertising and consumer protection requirements.
Contact Us
Susan Duarte: 703-714-1318 | sfd@commlawgroup.com
