Made in USA Claims: Why Using the Right Terms Matters Under FTC Rules

For companies advertising products as “Made in USA,” using the correct terminology is not merely a matter of patriotism. It is a matter of law and essential for avoiding legal consequences. The Federal Trade Commission (FTC) enforces strict guidelines to protect consumers from misleading claims and to ensure a level playing field for manufacturers. Improper use of “Made in USA” language can result in enforcement actions, civil penalties, and significant reputational damage.   This article discusses how to minimize legal risks from improper use of “Made in USA” claims.

I. Unqualified and Qualified Claims

The FTC distinguishes between unqualified and qualified Made in USA claims.

• Unqualified Claim: A claim that a product is “Made in USA” without any clarifying language implies that all or virtually all of the product was made in the United States. This means that all significant parts, processing, and labor must originate in the United States. Even a minor foreign component may render this claim deceptive under FTC standards.
• Qualified Claim: If a product contains imported components or undergoes partial foreign assembly, businesses must use qualified language to avoid misleading consumers. Phrases such as “Made in USA with imported parts” or “Assembled in USA from global materials” are examples of qualified claims that comply with FTC guidance.

II. Importance of Compliance

• Consumer Trust: Consumers rely on country-of-origin claims when making purchasing decisions. Misleading claims may damage brand credibility and reduce consumer confidence.
• Legal Exposure: In 2021, the FTC finalized a rule authorizing civil penalties of up to $50,120.00 dollars per violation for improper use of “Made in USA” labeling or advertising.
• Brand Reputation: FTC enforcement actions are public and often attract negative media attention, which can harm long-term business relationships and customer loyalty.
• Private Lawsuits: Misuse of “Made in USA” claims may also lead to litigation under 15 U.S.C. § 1125(a), the false advertising provision of the Lanham Act. This law allows competitors to pursue legal action for misleading claims that cause commercial harm. Additionally, plaintiffs may bring claims under state laws prohibiting unfair and deceptive trade practices, which may result in injunctions, monetary damages, and attorney’s fees.

III. Recommended Best Practices

• Ensure All Advertisers Understand the Rules: Responsibility does not rest solely with legal or compliance personnel. Your advertisers, marketing agencies, and third-party sellers must also be fully informed. Many FTC enforcement actions have resulted from claims made on packaging, social media, or third-party websites. If you work with outside advertisers, ensure they are trained and properly supervised. All product claims, especially those related to country of origin, should undergo compliance review prior to publication.
• Audit the Supply Chain: Maintain full knowledge of where all components originate and where final assembly is performed.
• Use Precise Language: Avoid vague statements such as “American Quality” or “USA Brand” if those phrases could be interpreted as implying full United States origin.
• Maintain Documentation: Be prepared to support any United States origin claim with comprehensive and accurate records.
• Train All Team Members: Ensure that all individuals involved in advertising, product descriptions, and labeling understand and adhere to FTC requirements.

IV. Conclusion

Using accurate and compliant language in product advertising is not only good business practice. It is legally necessary. Improper use of “Made in USA” claims may result in enforcement by the FTC, legal action under the Lanham Act (15 U.S.C. § 1125(a)), lawsuits under state consumer protection laws, and reputational harm. Businesses should proactively educate their teams, audit their claims, and verify that all internal and external communications comply with applicable standards. A properly qualified claim helps maintain consumer trust and protects your brand from legal and financial risk. Click HERE to learn more about Derek Fahey, Esq., the author of this article.