With tariffs – and fears about rising prices – on everyone's mind right now, companies that make their products in the United States are undoubtedly going to want to highlight in their marketing the advantages of buying American-made products. Before touting that your products are made here, however, it's important to ensure your advertising complies with U.S. standards on making "Made in the USA" claims.
Recently, TruthinAdvertising.org targeted the automaker Stellantis, accusing the company of falsely claiming that its cars are made in the United States. As TINA.org explained in its letter to the company, "Stellantis has every right to boast of its brands' assembly plants in the United States that create American jobs and strengthen the U.S. economy, but it cannot illegally embellish the amount of manufacturing that takes place domestically."
So, what are the rules about making U.S.-origin claims?
According to the Federal Trade Commission's Enforcement Policy Statement on U.S.-Origin Claims, in order to claim that a product is made in the United States, that product must be "all or virtually all" made here. That means that all significant parts and processing that go into the product are of U.S. origin and that the product contains only a negligible amount of foreign content. In addition, the product must have been last substantially transformed in the United States. Some of the other factors that FTC will consider when determining whether a product is "all or virtually all" made here include the portion of the product's total manufacturing costs that are attributable to U.S. parts and processing and and how far removed from the finished product any foreign content is. A few years ago, these standards were also codified in the FTC's Made in USA Labeling Rule.
When you can't make a "Made in USA" claim, you may be able to make a qualified claim, such as that the product is "Made in USA from imported parts." When you're making a claim that a product is made here with foreign ingredients, you still must be able to substantiate that the last assembly, processing, or finishing of the product occurred in the United States.
Advertisers can also make more limited U.S.-origin claims, so long as they are truthful, such as that the product was "designed in the United States" or "painted in the United States."
Be careful, though, about trying to use terms that may communicate the same meaning as a general U.S.-origin claim. The FTC has been pretty clear that words like "produced," "manufactured," and other similar terms, require the same substantiation as "Made in USA" claims.
The FTC has indicated, however, that "Assembled in the USA" claims mean something different. The FTC says that, in order to make an "assembled" claim, advertisers must be able to substantiate that the product has undergone its principal assembly in the United States, that the assembly is substantial, and that the product was last substantially transformed in the United States.
Historically, the FTC has aggressively enforced its "Made in USA" standards, targeting a wide range of products, including, for example, tractor parts, glassware, personal protective equipment, leather goods, and promotional products. So, caution is definitely warranted before making these claims!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
