If you’re asking whether you can put “Made in the USA” on your product, the short answer is: it depends — and the FTC is actively checking.
In March, the President issued an executive order directing the FTC to prioritize enforcement of “Made in the USA” claims. The FTC didn’t waste any time.
Last week, the agency announced enforcement actions against three companies and collected nearly $870,000 in consumer redress from businesses that made Made in USA claims they couldn’t substantiate. Here’s what you need to know before putting that label on your product.
What does “Made in the USA” legally require?
Believe it or not, “Made in USA” actually has a legal standard, which is found in theMade in USA Labeling Rule (at 16 C.F.R. Part 323).
To make a “Made in the USA” claim, your product must be all or virtually all made in the United States. That means:
- Final assembly or processing occurs in the US.
- All significant processing occurs in the US.
- All or virtually all ingredients or components are made and sourced in the US.
The product should contain no (or very negligible) foreign parts. Violations carry civil penalties of up to $53,000 per violation. Ouch.
What disqualifies a “Made in the USA” claim?
This is where most businesses can get tripped up.
First, assembly alone isn’t enough. A simple “screwdriver” assembly of foreign components in the US doesn’t cut it. The assembly must be substantial, and the product’s last “substantial transformation” must occur in the U.S.
Functional foreign components disqualify the claim. The FTC’s own example: a watch manufacturer using inexpensive imported movements, even if they represent a small fraction of total manufacturing cost,cannotmake an unqualified Made in USA claim.
Why?
Without the movements, the watch doesn’t tell time.
If a foreign component is essential to your product’s form or function, it’s more than negligible; it’s critical. That means the claim is off the table.
The three companies the FTC just took action against:
- TouchTunes Music Company assembled electronic dartboards in the US but used foreign-made components essential to the products’ operation. Settlement: $625,000.
- Americana Liberty and Three Nations marketed flags as “100% Made in the USA” and “Built by Americans for Americans” while importing products from China. Settlement: $167,743.
- Oak Street Manufacturing advertised footwear as “handcrafted 100%” in the US, but some components and final assembly happened overseas. Settlement: $75,000.
As you can see, these aren’t small amounts. These are significant penalties.
What about implied “Made in the USA” claims?
Your company doesn’t technically even have to use the words “Made in USA” to trigger FTC scrutiny under this rule. Instead, the agency looks at the overall impression your marketing conveys to consumers.
US flags, map outlines, references to American factories, or phrases like “true American quality” can all constitute an implied US origin claim. These are subject to the same standard.
Bottom line: Don’t imply you’re a USA-made brand if you’re not.
Can I use a qualified “Made in the USA” claim instead?
If your product includes meaningful US-made parts, manufacturing, or processing but doesn’t clear the “all or virtually all” bar, a qualified claim may be appropriate.
The FTC regularly recognizes:
- “Made in USA of US and Imported Parts”
- “Assembled in USA”
- “60% US content”
But note: qualified claims carry their own risks. The FTC cautions against using them unless the product has a significant amount of US content or processing, and even qualified claims must be truthful and substantiated (common language for anyone familiar with the FTC!).
For example: A treadmill assembled in the US from almost entirely imported parts cannot be labeled “Made in USA of U.S. and Imported Parts” if the US-made parts represent only about three percent of total component costs.
What are your brand’s ongoing obligations?
The FTC is clear: companies have an ongoing obligation to review their claims and substantiation for any advertising claims, but especially for “Made in the USA” claims.
If you begin sourcing parts overseas, if you move manufacturing/ assembly, or if a supplier’s content changes, then you must update your marketing materials, packaging, website, social media, and any other language related to your products.
What should you do now?
If your company makes any origin-related claim on product packaging, in advertising, on socials, in vendor-supplied materials, or anywhere on your website, audit those claims against the “all or virtually all” standard before the FTC does it for you.
This includes variations like “American-made,” “assembled in the USA,” “domestic,” or anything that implies US origin without qualification.
–>If you receive an FTC inquiry letter, civil investigative demand, or access letter related to Made in USA claims, treat it seriously. The FTC’s Bureau of Consumer Protection Director said it plainly: “We will robustly enforce the ‘Made in USA’ standard so that the American people have confidence that their purchases of American-made products support American workers and manufacturing.”
Way Law works with growth-stage businesses navigating exactly these questions. If you want to evaluate whether your current claims are substantiated, let’s talk.