What Is Considered American Made?

What Is American Made?

“American Made” is a label that carries an unspoken promise to all consumers that the product is of high quality and has supported the job security of its fellow Americans. Like most things, making a product in the US is much more complex and harder to define than just the simple geographical location in which a certain product is assembled.

While there is an abundance of laws and regulations that must be met to be considered American Made, there are many things that slide through the cracks. The official definition of “American Made is set by the Federal Trade Commission or FTC.

The FTC requires if a product is to be advertised as “Made in the USA”, that the product must be made entirely or virtually entirely made in the States.

This leaves many things left to the imagination. What does virtually entirely mean? What are businesses really having to do to be considered compliant with the “Made in the United States” standard?

What Is Considered Industry Standard?

For all products except for automobiles, textiles, wool, and fur, there is no law that requires a company to disclose the percentage of the content of the product that was made in the United States. These products are exempt from reporting to consumers if they are not advertising that they are American Made.

For companies that are advertising that their product is “Made in the USA”, they have many regulations that they must follow. The FTC requires that “all significant parts and processing’s that go into the product must be of U.S. origin. The product should contain no or negligible foreign content.”

If products are advertised in the U.S as American Made, the final assembly or processing must happen inside of the United States. The Federal Trade Commission looks primarily at the finished product and takes into consideration how much of the product is composed of foreign parts that are attributed to the product in total.

For products that are advertised as Made in America, they must be in the United States for final assembly in order to meet regulations.

The example given by the Federal Trade Commission is if a grills knobs and tubing, a minor portion of the total outcome, is from a foreign country; then it is alright to still be considered American made.

On the other hand, if a lamp is made in the U.S. and the base of the lamp is imported from overseas, the FTC does not consider that product to be predominately made in the U.S. For companies who manufacture this way; they are still eligible to be considered “Assembled in the US” as long as they follow certain protocol.

To determine if a product or company meets the FTC’s standards, it must first go through an evaluation of the company with extensive paperwork.

Assembled In The USA

While many companies cannot justify all parts and products being made here in the US, they still opt for what they think maybe the next best option which is Assembled in the USA. (Or made in the USA from domestic and imported parts).

“Assembled in the US” ensures consumers that they are providing at least some jobs in America when supporting the company. This makes consumers feel like they are giving back in a way, just by buying from the company.

To be considered “Assembled in the US”, the FTC’s regulations state that; the product must be “substantially transformed” by the manufacturing process. Items that are imported to the United States and the put together with a few simple screws and a screwdriver; still do not qualify as “Assembled in the US”.

Any business that chooses to advertise that their company is assembled in the US must also go through a certain protocol to make sure that they are obliged by the rules.

The Mix-Up

To adequately identify if a company is “Made in the US” or “Assembled in the US”, there is a very complex set of guidelines to follow. However, many of these regulations overlap each other creating confusion or room for companies to bend and break the rules.

For example, the Textile Fiber Products Identification Act; states that textile, wool and fur products are to disclose the percentage of their contents that are sourced in the US. While according to the government, the Buy American Act, “a given product must be manufactured in the U.S and more than 50% of the parts must come from the U.S.”

When it comes to buying and creating goods there are many gray areas, or areas that contradict each other. This in return leaves businesses in risk of violating laws.

However, there is not just one area of confusion on the laws of what is American Made, but also with U.S Customs. U.S Customs uses a different set of requirements than anybody else.

Under the laws of the U.S. Customs; if a “product is of foreign origin; manufacturers should make sure that each product and piece is stamped with the markings”. These markings should read “Made in Origin”. This way everything is tracked down from where it came from.

However, if all products that are from overseas, built or in pieces, have markings starting the county in which it was made; even if that piece was a contributing factor to a different product that was “American Made”, the product would still have two labels of origins.

Customs also struggle with enforcing these regulations. They are often noted to only act upon specific complaints; leaving many illegal shipments.

Finding Loopholes

With all the confusion that the laws and regulations bring on, many companies are finding loopholes in the system. Companies are finding more ways to make their product or company be “Made in the USA” when their product truly isn’t.

In fact, many larger companies make products in one country and ship them over to other US territories, so the product technically never hits true American Soil. Yet these companies still have labels on them that is American Made.

Companies with many pieces and parts; assemble and reform their products enough to where they pass the specifications required to still provide the Made in USA Label. Several have been sued for having a product completely made and sent over to the US, just to change the packaging and consider it to be made in the US.

There is a handful of industries that require certain materials to make their product, yet the material cannot even be found in the States. These companies then are forced to go overseas. Even if their production line is in America, they still must use some resources from other countries.

There are fewer companies that are truly American Made from top to bottom nowadays. The reason for the shift to manufacturing outside of the States varies from laws and regulations to even the cost of products and labor. Domestic versus foreign production has been a concern for a while. Although it has created an interconnected global economy, changing one law, regulation, or tariff could throw off the whole ecosystem. Fully American made products are getting harder to achieve, but many companies are bringing on workers here in the US; which not only creates jobs but also helps qualify the company to be considered “American Made”.