When a person tells you that a product is “made in the USA” you probably picture the same thing we all do: an industrious, hardworking American toiling in some factory in our country’s beloved heartland to make … a couch, let's say.But, what if the wood for the couch frame was from Brazil? What if the upholstery machine the laborer used was manufactured in China? What if the factory itself was owned by the Dutch? What if the employee was Canadian?Is that piece of furniture still made in America?The Federal Trade Commission's Magic 8-Ball
Perhaps unsurprisingly, the federal government has the last word on what’s considered to be made in the USA. The Federal Trade Commission (FTC) makes this determination for every product advertised or sold in the United States.To legally bear the “Made in the USA” label, a product must be “all or virtually all” made in the U.S. This applies to all major parts and processes and any product with the label must contain no (or negligible) foreign content.These rules, however, do not apply to the worker, the factory owner or the machinery. So, in our example above, all but one of those factors would be considered irrelevant to the FTC. Even so, that piece of furniture still could not
be advertised as being made in the USA.Why not?FTC Policy in Action
In our example, the couch’s frame would be considered a major component of the final product and the wood for that frame was imported from Brazil. Now, a manufacturer could dispute an FTC ruling against the labeling – because FTC preapproval is not a requirement for labeling and adjudication always takes place after the fact – but the manufacturer would probably lose.Why?The answer comes down to percentages and costs. We can assume that the wood represents a significant part of the manufacturing cost and the frame is obviously a critical part of the finished product. Taken together, this constitutes more than a negligible amount of foreign content – even if the product was made in America by Americans in an American-owned factory
.Is ‘Buying American’ Important?
Yes, of course it is – but it’s also important to understand what that means. The issue at hand is that a lot of products are made here in America by Americans, but do not carry the ‘Made in the USA’ label because the FTC is very strict. Similarly, a lot of products are made by American companies overseas or use American-made parts, yet are also not made in the USA as defined by the FTC.The FTC does provide options for companies to advertise these facts; you may see a couch
with a label that says "Made in America with Brazilian wood," for example. But, most manufacturers view the labeling rules in an all-or-nothing fashion, because marketing the particulars can often do more harm than good.Now, one could argue the merits of those FTC restrictions all day – and a lot of people do – but taking the higher ground on the issue involves researching the brands and products you like and deciding what’s important to you.And, we’re always happy to help you do that whenever it comes to our selection and services.