"Made in USA" label

The “Made in USA” label is a notification added to certain merchandise that meets specific requirements. Generally, the product needs to have been made within the jurisdiction of the United States of America and must be made of materials that are mostly from America. However, limited amounts of materials produced outside of America can be included in some circumstances. The use of the label is not mandatory in all industries, but all companies that choose to use the label must meet the criteria for using it. Companies that use the label often do so to attract the business of consumers who prefer to buy American-produced merchandise. At least one organization exists to help promote companies that use the “Made in USA” label.

Background

“Made in USA” labels are part of a concept known as country of origin (COO) labeling. The idea of labeling products with the country in which they were made was intended to allow customers to make informed buying choices. COO labeling began in 1930 with a tariff act passed by the US Congress.

The 1930 Tariff Act is also known as the Smoot-Hawley Tariff Act. It was intended to help American farmers struggling in the aftermath of World War I (1914–1918), when European farmers had rebounded from the war’s effects and American farmers were having a harder time selling their products at competitive prices. The act imposed large import taxes, or tariffs, on goods that came into the United States from other countries. Tariffs are used to discourage companies in other countries from selling in the country that imposes the tariffs; this in turn increases the domestic demand for products from within the country imposing the tax. Part of the act required many products to be clearly labeled with the name of the country in which they were produced. This included products that were made or grown in the United States.

Overview

The Federal Trade Commission (FTC) is in charge of ensuring companies using the “Made in USA” label meet the requirements for using it. The main requirement is that the item must have been made or grown within the fifty United States, the District of Columbia, or one of the sixteen American territories (Guam, Puerto Rico, US Virgin Islands, American Samoa, Northern Mariana Islands, and eleven uninhabited territories). Items that include multiple parts and require assembly must be made of parts that are all, or nearly all, made or produced in the United States. The labels are optional for many products but are required for all textile products, wool, fur, and automobiles.

Meeting the labeling requirements can be more complicated than it might seem for some products, especially those with many parts. For example, a blouse might be cut and sewn in America from fabric that was woven in America, but the silk that was woven into the fabric came from Asia. The finished blouse would be eligible for the “Made in USA” label because the original silk was substantially changed between when it entered the country and when it was made available for sale as a garment. However, if the fabric was woven in Asia and then purchased by an American company that cut and sewed the blouse, it would more properly be labeled “Made in USA of imported fabric.”

The guidelines for determining country of origin status are even more complicated than those for some other manufactured products. Cars, for instance, might be assembled in the United States but may have parts that are both made in America and in multiple other countries. The raw materials for these parts, even the ones made in America, may be from multiple countries. Determining the country of origin for cars is so involved that companies are required to list the percentage of parts that come from the United States. Parts made in Canada are treated as if they are American made, so the totals for the two countries can be listed together. A specific guideline that allows for rounding results in any car that is at least 70 percent made in the United States and/or Canada can be considered to be 100 percent American made. These rules were part of the American Automobile Labeling Act of 1994.

Other related labels are sometimes used, such as “Built in the USA” or “Designed in the USA.” Companies that do not meet the requirements of having all, or nearly all, of the materials that make up their product come from the United States sometimes use labels like this. Companies need to be careful in making claims related to a US origin to avoid significant fines from the FTC. Examples of times when a company could be fined for violating the “Made in USA” standards include companies that make products that use large percentages of materials from outside America even if the product itself is assembled in the United States. These companies may be able to label the product as “Made in USA” with qualifiers, such as “Assembled in USA from foreign parts.” Companies that have offices in the United States but manufacture the product outside of the country are not eligible for those products to carry the “Made in USA” label, since the minimum requirement is that the product must be assembled or built in the United States.

Companies often want to use the “Made in USA” label because a substantial number of consumers believe that buying American-made products protects and grows the American economy. Having the “Made in USA” label makes it easy for these consumers to identify products and choose them over foreign-made products. At least one organization—the Made in America Movement—maintains a website and database of companies that meet the “Made in USA” label standards.

Bibliography

“Complying with the Made in the USA Standard.” Federal Trade Commission,www.ftc.gov/tips-advice/business-center/guidance/complying-made-usa-standard. Accessed 26 Oct. 2018.

“Country of Origin Marking.” US Customs and Border Protection, www.cbp.gov/trade/nafta/country-origin-marking. Accessed 26 Oct. 2018.

Green, Dennis. “Here’s What ‘Made in the USA’ Really Means.” Business Insider, 5 Feb. 2017, www.businessinsider.com/what-does-made-in-usa-actually-mean-2017-2. Accessed 26 Oct. 2018.

Laurenzena, Paul. “American Factories versus ‘Made in America.’” Industry Week,11 Apr. 2017, www.industryweek.com/regulations/american-factories-versus-made-america. Accessed 26 Oct. 2018.

“Made in America: Behind the Made in America Label.” 50Roots, 26 Oct. 2017, www.50roots.com/made-america-behind-made-usa-label/. Accessed 28 Oct. 2018.

“Made in America Movement (MOM).” Made in America Movement, www.themadeinamericamovement.com. Accessed 26 Oct. 2018.

“Requirements for Country of Origin Marking on Goods Imported into the U.S.” US Customs and Border Protection, help.cbp.gov/app/answers/detail/a‗id/492/~/requirements-for-country-of-origin-marking-on-goods-imported-into-the-u.s. Accessed 26 Oct. 2018.

“Smoot-Hawley Tariff Act.” Investopedia, www.investopedia.com/terms/s/smoot-hawley-tariff-act.asp. Accessed 26 Oct. 2018.