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The “Made in USA” label is one of the most powerful marketing tools in American retail. Shoppers consistently say they prefer American-made goods and will pay more for them.
Given this interest, the label’s use is governed by federal law designed to protect consumers from being misled about where their products actually come from.
The Federal Trade Commission oversees these rules as part of its mission to prevent “unfair or deceptive acts or practices.” Making false claims about U.S. origin falls squarely within the agency’s jurisdiction.
For most products, making a “Made in USA” claim is entirely voluntary. There’s no general law requiring manufacturers to disclose how much U.S. content their products contain. However, if companies choose to make such claims—whether on labels, in advertisements, or online—they must prove those claims are truthful according to strict legal standards.
This creates a fundamental principle: companies that want to use this powerful marketing tool must play by rigorous rules designed to ensure the label’s integrity.
The “All or Virtually All” Standard
At the heart of FTC regulation is a deceptively simple principle: for a product to carry an unqualified “Made in USA” claim, it must be “all or virtually all” made in the United States.
The FTC traditionally enforced this standard for decades, but it was formally written into law with the Made in USA Labeling Rule in August 2021, giving the agency stronger enforcement powers.
An “unqualified” claim is a straightforward declaration like “Made in USA” or “American-Made” without conditions or limitations.
To meet this high bar, products must satisfy three core criteria:
Final Assembly or Processing in the U.S.: The product must undergo its final assembly or processing in the United States, meaning it takes its final, recognizable form within the 50 states, District of Columbia, or U.S. territories.
All Significant Processing in the U.S.: All important manufacturing steps that create the product must occur domestically. This goes beyond simply putting final pieces together—it includes any significant processes integral to the product’s form or function.
All or Virtually All Components are U.S. Sourced: The product should contain “no—or negligible—foreign content.” This is the most complex and scrutinized part of the standard.
What “Negligible Foreign Content” Actually Means
The term “negligible” doesn’t refer to a specific percentage. The FTC has intentionally avoided creating a fixed percentage rule and previously rejected proposals for a 75% “safe harbor.” This is because simple cost analysis might not capture a product’s true nature.
For example, a very small and inexpensive foreign component could be essential to the product’s primary function, making its presence highly significant to consumers.
Instead of a formula, the FTC conducts case-by-case analysis, weighing several factors to determine if foreign content is truly negligible. This flexible approach adapts to a vast range of products but places significant burden on manufacturers to have a “reasonable basis” for their claims.
Key factors in this analysis include:
Cost of Goods Analysis: The FTC considers what proportion of the product’s total manufacturing costs are attributable to U.S. parts and processing versus foreign costs. Very low foreign cost percentages are strong indicators, but not the only factor.
Remoteness of Foreign Content: The agency examines how far back in the supply chain foreign content appears. Raw materials like imported petroleum used to make plastic pellets that are then molded into product housing in the U.S. are considered far removed. In contrast, significant ready-made components imported and installed during final assembly are not remote at all.
Significance to the Final Product: Most importantly, the FTC assesses the importance of foreign parts to the product’s ultimate form or function. Components that are critical, even if cheap, can disqualify products from making unqualified “Made in USA” claims.
The strength of this standard—its adaptability—is also its primary challenge for businesses, as the ambiguity requires extreme caution.
FTC Examples: Making the Rules Concrete
The FTC provides official examples that clarify its thinking:
The Propane Grill (Permissible Claim): A company produces barbecue grills at a Nevada plant. Major components like gas valves, burners, and aluminum housing are all made in the U.S. However, the grill’s knobs and tubing are imported from Mexico. An unqualified “Made in USA” claim is likely permissible because knobs and tubing make up a negligible portion of total manufacturing costs and are insignificant parts of the final product.
The Table Lamp (Deceptive Claim): A lamp is assembled in the U.S. from American-made brass and an American-made Tiffany-style lampshade, but uses an imported base. Even if the base accounts for a small percentage of total manufacturing cost, an unqualified “Made in USA” claim would be deceptive. The base is a significant part of the final product and isn’t far enough removed in the manufacturing process to be considered inconsequential to consumers.
The Watch (Deceptive Claim): A company assembles watches in a U.S. plant using U.S. parts and labor, but incorporates inexpensive Swiss movements. While movements may represent a small portion of total cost, they’re essential to the watches’ core function. Therefore, an unqualified “Made in USA” claim would be inappropriate because the foreign component is critical to the product’s purpose.
These examples demonstrate that companies can’t simply rely on cost spreadsheets. They must also perform qualitative assessments of each component’s role and significance to determine if “Made in USA” claims are legally defensible.
When Products Can’t Meet the Full Standard
Many products manufactured in the United States contain foreign components and can’t meet the stringent “all or virtually all” standard. For these products, the FTC allows qualified claims—truthful and specific statements about U.S. content.
These claims must be clear, conspicuous, and carefully worded to avoid creating misleading impressions. This regulatory pathway encourages transparency, allowing companies to highlight domestic production without deceiving consumers.
However, the system relies on consumers understanding subtle but critical differences between various phrases.
“Assembled in USA”: The Most Common Qualified Claim
One of the most common qualified claims is “Assembled in USA.” This claim has specific requirements and isn’t interchangeable with “Made in USA.”
For companies to legally make “Assembled in USA” claims, two conditions must be met:
Principal Assembly in the U.S.: The product’s main and most important assembly must take place in the United States.
Substantial Transformation in the U.S.: The assembly process itself must be “substantial.” This key legal concept, also used by U.S. Customs and Border Protection, means components are physically combined in the U.S. to create a “new and different article” with a new name, character, and use.
This “substantial transformation” test is critical. The FTC has clarified what doesn’t qualify with its “screwdriver caveat.” If a product’s major components are all imported and then put together in a simple “screwdriver” operation in the U.S., this isn’t considered substantial assembly. In such cases, “Assembled in USA” claims would be deceptive.
The assembly must be a complex and meaningful process that truly transforms the nature of the components.
Other Types of Qualified Claims
Beyond assembly, companies can use various other qualified claims to accurately describe their U.S. production activities. The key is that claims must be specific and truthful.
Specifying U.S. Content: Companies can state percentages of U.S. content, such as “60% U.S. Content,” or use general disclosures like “Made in USA of U.S. and Imported Parts.” This approach is transparent about mixed component origins.
Specifying Foreign Content: Claims can highlight domestic manufacturing while identifying key foreign part sources, such as “Made in USA from Imported Leather” or “Couch Assembled in USA from Italian Leather and Mexican Frame.”
Specifying U.S. Process: Companies can make narrow claims about specific creation processes that occurred stateside, such as “Designed in USA” or “Painted in Ohio.” When making such claims, it’s crucial they refer only to specific processes and don’t create misleading impressions that entire products were made in the U.S.
While qualified claims offer legally compliant ways to communicate partial U.S. production, there remains risk that consumers may not fully grasp legal distinctions. Shoppers might see “Assembled in USA” and mentally equate it with “Made in USA,” even though legal standards are vastly different.
Understanding Different Types of Claims
| Type of Claim | Example | Key Requirement(s) | When to Use |
|---|---|---|---|
| Unqualified Claim | “Made in USA” / “American Made” | “All or virtually all” domestic components, processing, and final assembly. Foreign content must be negligible. | When a product is genuinely of domestic origin with no significant foreign input. |
| Qualified Claim (Assembly) | “Assembled in USA” | Principal assembly is substantial and occurs in the U.S., resulting in “substantial transformation” of components. | When a product has significant foreign components but undergoes final, complex assembly in the U.S. |
| Qualified Claim (Content) | “Made in USA of U.S. and Imported Parts” / “60% U.S. Content” | Contains significant U.S. content/processing but doesn’t meet “all or virtually all” standard. Must be truthful and specific. | To highlight U.S. production while being transparent about foreign component presence. |
| Qualified Claim (Process) | “Designed in USA” / “Packaged in USA” | The specific process occurred in the U.S. The claim must not imply the entire product is of U.S. origin. | When only a specific part of product creation is domestic and companies want to highlight that contribution accurately. |
The Power of Implied Claims
A “Made in USA” claim doesn’t have to be stated in explicit text to fall under FTC jurisdiction. The agency’s rules also cover implied claims.
To determine if an implied claim has been made, the FTC evaluates the “overall—or net—impression” that advertisements, labels, or promotional materials are likely to convey to reasonable consumers. This “net impression” doctrine recognizes that marketing is powerful communication where symbols and context can be just as influential as literal statements.
Several elements can contribute to implied U.S. origin claims, even without the words “Made in USA”:
Patriotic Symbols and Imagery: Prominent use of U.S. flags, American map outlines, eagles, the Statue of Liberty, or other well-known patriotic symbols can, depending on context, create impressions that products are of U.S. origin.
Geographic References: Advertisements that highlight companies’ U.S. factory locations or corporate headquarters in promotional ways may also convey U.S. origin claims.
Suggestive Phrasing: Use of phrases like “true American quality” or “American craftsmanship,” especially when combined with images of American factories or workers, can contribute to overall impressions of domestic manufacturing.
This means company marketing departments must be just as careful as legal departments. Advertisers can’t create campaigns that are technically true in every statement but designed to deceive through symbolism.
For example, an ad for a foreign-made product saturated with American flags featuring workers in a U.S. factory talking about “American values” would likely be seen by the FTC as creating deceptive implied claims, even if the words “Made in USA” never appear.
However, the FTC also clarifies what’s generally not considered an implied claim. A well-known U.S. company using its brand name on a product manufactured abroad doesn’t, by itself, constitute a U.S. origin claim, provided the brand name doesn’t explicitly denote U.S. origin. Similarly, non-prominent listing of companies’ U.S. addresses on packages, as may be required by other labeling laws, isn’t typically interpreted as U.S. origin claims.
Special Cases: Mandatory Labeling Requirements
While the FTC’s “all or virtually all” standard applies to voluntary claims for most products, federal law singles out specific industries and mandates that they provide consumers with country-of-origin information. For these products, disclosure isn’t optional.
This legislative judgment reflects the historical and economic significance of these sectors, where Congress determined voluntary claims were insufficient to protect consumers and domestic industries from global trade complexities.
Automobiles: Detailed Origin Requirements
Since October 1, 1994, every new passenger motor vehicle sold in the United States must display a label detailing its domestic and foreign content, as required by the American Automobile Labeling Act. The information on this label, overseen by the National Highway Traffic Safety Administration, is distinct from the FTC’s general standard.
The AALA label must clearly state:
- The percentage of U.S. and Canadian parts content, by value, calculated on a “carline” basis (a group of vehicles with similar construction) rather than for each individual vehicle
- Names of any countries other than the U.S. and Canada that individually contribute 15% or more of equipment content, along with specific percentages for each (up to two countries maximum)
- The final assembly point, including city, state (where applicable), and country
- The country of origin of the engine
- The country of origin of the transmission
This label must be placed prominently where it can be read from the vehicle’s exterior, often as part of the Monroney (price information) sticker. Consumers can also access annual reports detailing this information directly from NHTSA’s website.
Textiles: Complex Labeling Rules
Clothing and other textile products are subject to mandatory country-of-origin labeling rules enforced by the FTC under the Textile Fiber Products Identification Act and related acts for wool and fur. These laws were likely enacted not just for consumer transparency but also as industrial policy to support a sector facing intense global competition and significant job losses.
Labeling requirements under the TFPIA are nuanced and depend on where materials were sourced and where manufacturing took place:
Products Made Entirely in the U.S. from U.S. Materials: These items must be labeled with clear phrases such as “Made in U.S.A.”
Products Made in the U.S. with Imported Materials: Labels must be qualified to show both production aspects. For example, a shirt made in a U.S. factory using fabric woven in another country would need a label like “Made in USA of imported fabric” or “Knitted in USA of imported yarn.”
Products Partially Manufactured in the U.S. and Abroad: If products undergo manufacturing processes in multiple countries, labels must identify these steps. Examples of compliant labels include “Sewn in USA of imported components” or “Comforter Filled, Sewn and Finished in the U.S. With Shell Made in China.”
The TFPIA covers most clothing and common household textile articles, such as bedding, curtains, and towels, but contains specific exemptions for items like hats, shoes (unless made of wool), and upholstery stuffing.
Enforcement: Real Penalties for False Claims
For many years, FTC enforcement of “Made in USA” standards was criticized as a “slap on the wrist.” The agency typically relied on its general authority under the FTC Act, which often resulted in “no-money, no-fault” settlements where companies would agree to stop making deceptive claims but faced no financial penalties for initial violations.
This changed dramatically in August 2021, when the FTC finalized its Made in USA Labeling Rule. This rule was a game-changer because it formally codified the “all or virtually all” standard and, crucially, gave the agency authority to seek civil penalties for first-time violations.
Under the rule, the FTC can now pursue monetary penalties of up to $53,088 per violation (adjusted annually for inflation) without first having to issue cease-and-desist orders and wait for violations. This new authority marked a clear strategic shift from a policy focused primarily on compliance to one centered on deterrence through significant financial punishment.
The agency now views “Made in USA” fraud not as minor marketing errors but as serious economic deception that harms both consumers who are tricked into paying premiums and honest American businesses that play by the rules.
Recent Enforcement Cases
Since the 2021 rule took effect, the FTC has launched aggressive enforcement actions, resulting in millions of dollars in penalties and sending clear messages to the market.
Williams-Sonoma: The home goods retailer was ordered to pay a record $3.17 million civil penalty in 2024 for violating a 2020 FTC order. The company had continued making false claims that certain Pottery Barn Teen brand upholstered furniture, Goldtouch bakeware, and Rejuvenation brand kitchenware were “all or virtually all” made in the U.S. when they were actually made in China.
Kubota North America Corporation: In January 2024, the tractor and heavy equipment company was hit with a $2 million penalty for falsely labeling thousands of replacement parts as “Made in USA.” The FTC found that many parts were either wholly imported or incorporated significant imported materials, and that the company had failed to update packaging after shifting production overseas.
Chaucer Accessories and Thomas Bates: These New England-based clothing accessory manufacturers were fined a combined $191,481 for falsely promoting their belts, bags, and wallets as “Made in USA” and “Hand Crafted in the USA.” The FTC’s investigation found many products were wholly imported or contained significant imported components. The agency specifically rejected the company’s qualified claim of “Made in USA from Global Materials” for belts where only buckles were attached in the U.S., deeming this a “de minimis,” or insignificant, finishing step that couldn’t substantiate claims.
Instant Brands (maker of Pyrex): The company was ordered to pay over $129,000 for a violation highlighting the rule’s reach into digital marketplaces. While Pyrex-brand glass measuring cups in question were correctly marked on products themselves as “Made in China,” the company continued marketing them on Amazon with “Made in USA” claims, violating the rule.
These cases demonstrate a clear pattern: the FTC is actively using its new powers to hold companies financially accountable for deceptive U.S. origin claims across all forms of marketing, from physical labels to online product listings.
The Economics Behind the Label
The rules governing “Made in USA” labels don’t exist in a vacuum. They’re part of a larger national conversation about domestic manufacturing’s role in the U.S. economy, supply chain resilience, and the values consumers associate with American-made products.
Manufacturing’s Changing Landscape
For decades, the United States experienced significant manufacturing job decline as many companies moved production overseas for lower labor costs. Between 1998 and 2010 alone, the U.S. lost over 5 million manufacturing jobs.
However, recent years have seen growing “reshoring” movement—bringing manufacturing back to the U.S.—driven by factors like rising foreign wages, supply chain disruption concerns exposed during COVID-19, and desire for greater national economic security.
This shift is reflected in broad government policy. Recent administrations have launched whole-of-government efforts to strengthen domestic supply chains, such as the one initiated by Executive Order 14017. A key part of this strategy was creating the Made in America Office within the Office of Management and Budget, tasked with ensuring the federal government maximizes its use of American-made goods in its own procurement processes.
“Buy American” vs. “Made in USA”: Different Rules
It’s important to understand the difference between the FTC’s “Made in USA” standard, which applies to marketing claims for consumer products, and the Buy American Act of 1933, which governs what the federal government itself buys.
The Buy American Act requires federal agencies to give price preferences to “domestic end products” when making purchases. Standards for what qualifies as a “domestic” product under this act are different from the FTC’s “all or virtually all” rule and have been updated over time to increase domestic content requirements.
While both policies aim to support American industry, they apply in different contexts—one to consumer marketing and the other to government purchasing.
Consumer Perceptions and Market Reality
The power of the “Made in USA” label ultimately comes from the meaning consumers assign to it. Multiple surveys and studies have explored this perception, revealing a complex mix of patriotism, economic calculation, and persistent confusion.
High Value and Willingness to Pay More
There’s overwhelming evidence that American consumers value and prefer domestically made products. They often associate the label with higher quality, better safety standards, and the desire to support American jobs and the national economy.
This preference translates into tangible economic incentives. A 2020 Reshoring Institute survey found that nearly 70% of respondents prefer American-made products, and over 83% said they’d be willing to pay up to 20% more for them. A separate study found that “Made in USA” claims could command price premiums of as much as 28%.
This willingness to pay more is the primary reason companies are motivated to use the label, and it’s also what makes fraudulent use so harmful to consumers who are deceived into paying premiums for products that don’t meet standards.
Consumer Confusion Persists
Despite strong feelings, many consumers aren’t clear on the legal definition of “Made in USA.” A Michigan State University study found significant gaps between what consumers believe the label means and what they think it should mean.
While their beliefs often align with the FTC’s standard (assembled in the U.S. with U.S. parts, allowing for some foreign raw materials), their expectations are even stricter (U.S. assembly, U.S. parts, and U.S. raw materials).
This gap between the powerful emotional symbolism of the label and the complex, globalized reality of manufacturing is where consumer deception can thrive, and it’s the primary reason why strong FTC regulation is necessary.
Changing Trends
The label’s influence isn’t static. A 2025 Conference Board survey suggested that the power of the “Made in USA” label to influence purchases had declined by 18% since 2022. This shift was attributed to rising price sensitivity and inflation, with the decline sharpest among older Americans, who have historically been most loyal to domestic brands.
Interestingly, the same survey found that negative perceptions of the label fell among consumers under 35, hinting at growing interest in domestic production tied to values like sustainability and job creation. This shows the label’s power is dynamic, operating within a complex interplay of patriotism, perceived quality, and real-world economic pressures.
How to Report Suspected Violations
The Federal Trade Commission relies on public reports to help identify and stop companies making false or misleading “Made in USA” claims. If you purchase a product or see an advertisement you believe violates standards, you can play an active role in consumer protection by filing a complaint.
These reports are vital information sources for the FTC, helping the agency detect fraud patterns, launch investigations, and bring law enforcement actions that protect all consumers.
You can report suspected violations directly to the FTC through two primary channels:
By Phone: Call the FTC’s toll-free helpline at 1-877-FTC-HELP (1-877-382-4357).
Online: Use the FTC’s dedicated fraud reporting website.
When filing complaints, be prepared to provide as much detail as possible, including company names, specific products, where you saw claims (on packages, in online ads, on websites), and why you believe claims are false.
Understanding What You’re Really Buying
The “Made in USA” label represents one of the most regulated marketing claims in American commerce. While the rules are complex, the goal is simple: ensuring that when companies make claims about domestic origin, those claims are truthful and substantiated.
For consumers, understanding these rules helps you make informed purchasing decisions. When you see “Made in USA,” you can be confident the product meets strict federal standards. When you see qualified claims like “Assembled in USA” or “Made in USA of imported parts,” you know exactly what level of domestic content you’re getting.
The FTC’s aggressive new enforcement approach means companies face real financial consequences for deceptive claims. This creates stronger incentives for truthful labeling and helps ensure that the premium you pay for American-made products actually supports domestic manufacturing and jobs.
Whether driven by patriotism, quality concerns, or economic considerations, your preference for American-made products can be a powerful force in the marketplace—but only if the labels you rely on are accurate and meaningful.
Our articles make government information more accessible. Please consult a qualified professional for financial, legal, or health advice specific to your circumstances.
