Made in USA May Not Mean What Consumers Think

What does Made in USA really mean? In a legal sense, it may mean less than consumers assume.

The Made in USA claim has market value, and manufacturers know it. Many are willing to pay a premium for a product with labeling that indicates it was made domestically.

So temptation exists for manufacturers to stretch the boundaries of what constitutes a consumer good that is American made.

The Federal Trade Commission addresses this situation with a set of rules governing Made in USA claims. The rules start simple but can get confusing and complex.

Under the FTC rules, manufacturers are not required to disclose the country of origin for most products. Disclosure is mandatory only for domestically-produced fur, wool, textiles or cars, all of which are required to carry a Made in USA label.

Things start to get complicated when products have mixed origins. For example, a garment may be sewn in the U.S. of imported fabric. In that case, a Made in USA claim would be considered deceptive by FTC standards.

So what does it take to make an unqualified Made in the USA assertion? Not as much as you might think, and the rule isn’t perfectly clear.

The FTC’s current rule is that the product must be “all or virtually all” made domestically. To determine that, the agency considers how far removed from the finished product the foreign content is, and how much of the product’s final production cost go to U.S. parts and processing.

So according to the FTC, a barbecue pit assembled in the U.S. with all U.S. parts except for tubing and knobs from Mexico could be labeled Made in USA without being deceptive.

On the other hand, a table lamp produced in the U.S. from U.S. parts but with an imported base could not be labeled Made in USA because the base is a significant part of the finished product and because the base is not far-enough removed from the finished product.

The FTC does not offer upstream approval of Made in USA labeling before it is implemented on the product, nor does it perform spot-checks on products already in the market. Enforcement comes after the fact, in response to complaints received.

Other legal options are available for consumers who would rather take their own initiative to get recourse against deceptive labeling.

In June 2014, for example, a California woman started a consumer class action lawsuit against the fashion brand Citizens of Humanity and Macy’s Inc., alleging that the jeans she purchased that were labeled “Made in the U.S.A.” were not truly that since they contained certain components that were actually imported.

The plaintiff says the labeling on the jeans was deceptive and led her to pay more for the jeans than she would have been willing to pay had she known about the foreign components.

California has its own law governing Made in USA labeling. Until recently, and at the time the Citizens of Humanity class action lawsuit was filed, that law had been extremely strict, forbidding Made in USA labeling if any part of the finished product was produced or substantially produced outside the U.S.

In September, the state relaxed that standard, allowing Made in USA labeling on products with foreign components that make up no more than a certain percentage of the finished product’s wholesale value.

Join a Free Citizens of Humanity ‘Made in the USA’ Class Action Lawsuit Investigation

If you purchased one or more Citizens of Humanity apparel products in California in the past four years based, in part, on a “Made in the USA” label, you may be able to seek compensation by joining a class action lawsuit investigation.

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