“Made in America” Doesn’t Always Mean What You Think
February 10, 2015
Increasingly, companies are marketing products as “Made in America” or “Made in the USA” to appeal to the patriotic pride of consumers. But how accurate are those “Made in America” claims? For example, if a product is assembled in a factory in Missouri but is made of raw materials imported from Korea, is it really “Made in the USA”?
What the Law Says
The Federal Trade Commission (“FTC”) has established a standard for “Made in America” claims. To meet the FTC’s standard, a product must be “all or virtually all” made in the United States. In other words, a product can be labeled “Made in America” if it contains a negligible amount of foreign content. There is not a bright-line rule for evaluating whether a product meets the FTC’s “all or virtually all” standard, but several factors are considered. These factors include the portion of the product’s total manufacturing costs attributable to U.S. parts and processing, how far removed the finished product is from any foreign content, and whether or not the final assembly takes place in the United States.
California, however, has a much stricter standard for “Made in America” claims. The California law, codified at section 17533.7 of the state’s Business and Professions Code, states that a “Made in America” claim is unlawful if “any article, unit, or part [of the product] has been entirely, or substantially made, manufactured, or produced outside of the United States.” In other words, in California, it is possible that labeling a product as “Made in America” is unlawful when it contains even one screw manufactured outside of the United States.
Because it is possible for a “Made in America” claim to be unlawful in California but lawful in the other 49 states, companies must be vigilant to ensure that they are complying with the California law. It is likely that some products must be labeled differently when sold in California than how it’s labeled when sold in all other states.
If you have purchased a product labeled “Made in America”, call us and we’ll investigate free of charge. If the product was purchased in California (or perhaps bought online from a company based in California), there is a very high bar the product must meet in order for the claim to be lawful.
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