Before a manufacturer labels a product “Made in USA” or “Assembled in USA,” it is important to be sure the product meets federal and state regulations for labeling. Unfortunately, the regulations can be vague, complicated and subject to interpretation.
The Federal Trade Commission (FTC) oversees the federal regulations to prevent companies from false advertising of overseas production and deceptive trade practices.
- Federal Trade Commission oversees “Truth in Advertising” regulations including promotion or disclosure of products displaying “Made in USA” labeling
- FTC requires products advertised as “Made in USA” be “all or virtually all” made in the U.S. “all or virtually all” means the product should contain no – or negligible – foreign content
- Manufacturers use the cost of goods sold or inventory costs of finished goods in their analysis – total cost of all manufacturing materials, direct manufacturing labor, and manufacturing overhead
- For a product to be considered “all or virtually all” made in the United States, the final assembly or processing of the product must also take place in the United States
So how is “all or virtually all” defined? It depends.
Our manufacturing industry research covers this controversial topic and we found that most interpretations of “all or virtually all” means that more than 95% of the value of product parts, labor, and overhead is the typical measure. This means that you would have to look at the detailed bill of materials and valida