FTC Issues Enforcement Policy for “Made in USA” Marketing Claims

April 21, 2021 | The Toy Association is alerting all members who manufacture in the U.S. and wish to make unqualified “Made in USA” claims that the Federal Trade Commission (FTC) has recently stepped-up enforcement of its rule for such claims with significant monetary penalties being levied.

The FTC’s position is that manufacturers making an unqualified “Made in USA” claim for a product should, at the time of the representation, have a reasonable basis for asserting that “all or virtually all” of the product is made in the United States.

According to the agency’s enforcement policy statement, all of the following must be true in order to meet the “all or virtually all” standard for such claims:

• Final assembly or processing of the product occurs in the United States;
• All significant processing that goes into the product occurs in the United States; and
• All or virtually all ingredients or components of the product are made and sourced in the United States.

The rule is based on the agency’s determination that an average consumer would understand an unqualified “Made in USA” claim as requiring the above. Qualified claims such as “Produced in USA of U.S. and China Components” or similar wording (as long as it is factual and not misleading) are still allowed.

“While minor components having a negligible contribution to the cost or function of item (e.g. screws, packaging twist ties, etc.) sourced elsewhere may pass agency muster, there is otherwise very little wiggle room in the “Made in USA” rule, and enforcement has been strict,” noted Alan Kaufman, senior vice president of technical affairs at The Toy Association. “The agency also asserts it has enforcement authority for such claims made in mail order catalogs and online advertising, although this is somewhat controversial.”

Questions on this topic may be directed to The Toy Association’s Alan Kaufman.