YJ Draiman for Mayor of Los Angeles 2022
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Made in the USA YJ Draiman
Made in USA Draiman  

 

"Made in USA"

Los Angeles Elections 2022

 
"Made in USA" syndrome. It is no longer just where a product is made, it is also where is the company headquartered and are they using double Irish to avoid paying US taxes. I don't blame the corporations such as Google and Accenture and Microsoft for serving their taxpayers but I am blaming us the American citizen for not understanding the loss of this income to the US government.
 
Many items are made on US soil but the corporate headquarters where the majority of the jobs are located as now in Europe. The loss of marketing, accounting and administrative jobs is a huge loss to the US.
 
Celebrate made in US is not about just where a product is made, it is about the support of the US economy - the jobs it provides, the corporate taxes paid.
 
American citizens need to read this discerning trend but also consider the other ramifications of the company behind the product they are buying.
 
A purchase, even the tiny purchase such as bubble gum, chocolate, moisture cream can provide economic benefits to the United States.
Cocoa is not "made" in the USA, but the companies who market, distribute MAY be more American than some candy bars that you and I grew up with. The names in the game have not changed but in many cases, the corporate ownership HAS CHANGED.

Candidate for Mayor of LA 2022 – YJ Draiman
 
http://www.yjdraimanformayor.com





The Future is Made in America
"Made in America"
We must preserve and consolidate the stability of our economy. The answer to our problems won't come from lack of financial discipline. We won't find it by returning to budgetary deficits or to high inflation rates. To achieve economic development, it is mandatory to have economic stability.
Then we must improve productivity and efficiency. It is true that we have made macroeconomic advances. Now we must work hard at the microeconomic. We have to strengthen productivity in the workers and businesses. We must achieve a rapid technological actualization; train the workers as well as the companies; achieve a competitive condition in the input factors used by the American enterprises; continue to streamline all of those aspects that affect the investment and the efficiency of workers and companies.
Last, but not least, is my social policy. This is what I place the most importance upon. We have to invest in people, break the vicious circle of poverty and incorporate millions of on unemployed into the modern sectors of the economy. This is my simple proposal: to achieve economic growth with a more favorable income distribution through education and training that will translate into an improved benefit for families. The most powerful point in my campaign is the impoverished family's well-being and equal LA City services to all the people.
 


 
American manufacturing has been decreasing for two generations – It is time to reverse that trend.
Measured as an engine for employment or as a chunk of the economy, American manufacturing has been retreating for two generations. The economy has shifted steadily from generating wealth by making things to counting on finance, insurance, real estate, and other white-collar activities to fuel growth. In 1947, manufacturing accounted for more than 25 percent of the nation's gross domestic product, while finance, insurance, and real estate produced less than 11 percent. By 2009, manufacturing had shrunk to 11 percent of the economy, while those other activities' share had doubled to 21 percent.
Moreover, the profile of American manufacturing has been transformed. Labor-intensive, low-value-added production has all but disappeared. The textile, leather, and apparel industries, which in 1977 accounted for nearly 7 percent of all manufacturing activity, shrank to less than 2 percent by 2008.
Increasingly, U.S. manufacturers have focused on producing capital-intensive goods: computers, electronic products, chemicals, and, soon, energy technologies. "The nuclear business has come alive again," said Eric Garrard, president of Wise Machine, whose shop is making coils for a nuclear reactor. "[It] may be the saving grace for a lot of the manufacturing firms."
But the new American manufacturing sector employs far fewer workers. Only 11 million people now make things in the United States, the lowest number since World War II.
Before the recent recession, however, the value of U.S. manufacturing output had reached an all-time high. The United States still hosts the world's mightiest manufacturing economy, producing 21 percent of all goods made globally. Japan is a distant second, at 13 percent. China, at 12 percent, ranks third.
The reason that the United States has remained the world's manufacturing leader while in relative decline is, in a word, productivity. U.S. manufacturers are the most efficient in the world. AK Steel, for instance, produces more steel today than in the 1970s, with a third of the workforce. This productivity has also helped fuel the rest of the economy. For every dollar that manufacturers spend directly, they foster another $1.40 in economic activity--a multiplier larger than for any other sector.
Manufacturing remains critical to American economic success. Exports of goods account for three-fifths of all U.S. sales abroad, paying the bill for imports of consumer products and oil. Without them, the U.S. trade deficit--at record levels before the recession--would be even worse.
Despite the recent boom in exports of goods, the nation's share of the world's manufacturing trade has been shrinking. China is predicted to overtake the United States next year as the world's leading producer of manufactured items measured by value. And the future looks bleak. From 1989 to 2001, the United States recorded a trade surplus in advanced-technology products, including biotech. Those are the same capital-intensive goods that economists have long argued would naturally be Americans' domain, as the production of labor-intensive wares, such as apparel, moved overseas. Since 2002, however, the U.S. has run a deficit in advanced-technology trade.
Other hindrances may lie ahead. Workers can produce only as much as their plant and equipment permit, and until recently, U.S. industrial production capacity had grown robustly--through good times and bad. In the past decade, however, companies have shown a reluctance to invest in new capacity, which has grown at a third of its 1990s pace. When the economy eventually rebounds, this may limit U.S. manufacturers in satisfying domestic and foreign demand.
Manufacturers are also an important source of innovation, accounting for more than two-thirds of all research and development conducted in the United States. Since 1999, however, American manufacturers have increased their research-and-development investments outside the United States three times as fast as at home.
Manufacturing wages also bolster the economy. Manufacturing workers get higher pay and more generous benefits--20 percent higher in 2007--than Americans in nonmanufacturing jobs, although wages have recently been growing slowly, if at all.
"If you give up on manufacturing," New America's Schwenninger cautioned, "you give up lots of future productivity gains--and gains in the standard of living."
 
INNOVATION IS THE KEY
The conventional wisdom is that the United States can thrive simply as a place for research and development--that the country no longer needs to actually make things. But this assumes that new products spring full-blown from the minds of laboratory scientists. The reality is that in most industries, the manufacturing process itself is a critical factor in developing radically new products.
In the County, the presence of multiple manufacturers has been self-reinforcing. "People don't understand how much manufacturers feed off each other," said Diane Sheets, the business-development manager of the County Community Development Corp. That symbiotic relationship is vital, she said, in prompting innovation and an entrepreneurial spirit.
For one thing, creating and sustaining a network of competitive manufacturing entails day-to-day interaction between suppliers and customers, which allows each to learn from the other. "The knowledge underlying emerging technologies requires person-to-person contact among manufacturing industries and between manufacturing and services," said Gregory Tassey, a senior economist at the National Institute of Standards and Technology. That interaction is harder when a company's supply chain stretches around the world.
New manufacturers also rarely emerge in a vacuum. They typically morph from existing businesses, when coworkers who think they can build a better gadget than their current employer go out on their own. In the 1970s, the founders of Penn United did just that, spinning off from Oberg Industries, another precision-tool firm down the road. This was history repeating itself: Oberg Industries, too, got its start when its founder left a larger local company in the late 1940s. If U.S. manufacturers move abroad, foreign entrepreneurs create these start-ups.
Consider what happened when the U.S.-based manufacturing of semiconductors and flat-panel displays for computers and televisions moved to China more than a decade ago, as Harvard Business School Professors Gary Pisano and Willy Shih have recounted. At first, American economists saw no cause for concern, arguing that these weren't part of the core manufacturing capability that the United States needed. The experience that the Chinese gained in making computer chips and screens, however, taught them how to process ultrapure, crystalline silicon into wafers and to apply thin films of the silicon onto large glass sheets. By so doing, they created a solar panel industry that has become a major international player.
"The United States cannot continue to rely on outdated economic-growth strategies that fail to understand the complexity of industrial technology and the synergies among supply chains," economist Tassey said.
 
METHODS OF REVIVAL
During the past couple of years, a national preoccupation with Wall Street's meltdown and the ensuing recession has crowded out any serious debate about how to revive American manufacturing. So has the customary aversion to government-directed industrial policy, often demeaned as "picking winners and losers."
These attitudes, however, may be changing. Despite the distrust of government that Americans displayed in the November congressional elections, four of five Americans support a national manufacturing strategy, according to a poll that the Alliance for American Manufacturing conducted last spring. Proponents of a government-led strategy say that it needs to be comprehensive, with tax cuts, helpful regulations, and interrelated efforts to preserve and rebuild core industries, the small companies that cluster around them, and their skilled managers and workers.
So far, the specter of such a strategy hasn't raised the tea party's hackles or provoked a political furor over government's proper role. Indeed, political antagonists have found points of agreement. Recommendations issued in November by a bipartisan budget commission suggest growing sentiment that the corporate tax rate--among the highest in the world--ought to be reduced to encourage companies to base their operations in the United States.
Similarly, Democrats as well as Republicans support a tax credit for research and development, which lapsed a year ago for the 14th time in the past three decades. The United States accounts for about a third of the world's R&D spending, far more than the second-place Europeans. Still, relative to the size of its economy, America’s spends on research and development ranks eighth among major industrial economies.
But R&D isn't enough. "An R&D policy should not be confused with a manufacturing policy," First Solar's Sohn warned. "The worst thing would be for us to tap into the ingenuity of our engineers and come up with products and manufacturing processes, and then go and put [them] overseas because that is the only place that it makes sense to make things."
Manufacturers gravitate to societies that show they want them, said Sohn, whose company operates factories in Germany, Malaysia, and Perrysburg, Ohio. "We were attracted to Malaysia," he noted, "because of their focus on manufacturing. It starts with a tone in the country. Politicians and businessmen there have acknowledged the utility and value of having manufacturing as a base, and they have established a set of policies that were attractive," including lowering taxes and providing access to low-cost capital.
Subsidies can dry up, of course, and tax benefits can be withdrawn. Manufacturers also look for stable--preferably growing--domestic demand. That's one reason First Solar built a factory in Germany and is expanding it. German utilities are required to buy electricity produced by consumers' roof-top solar panels
at a price set high enough to enable them to pay for its installation. Giving every consumer a chance to earn money as an electricity producer has sent German demand for solar panels skyrocketing.
Research and development alone won't assure a future for American manufacturing.
A vibrant American market for manufactured goods will be harder to achieve, given the likelihood of continual slow growth. The 2009 economic-stimulus package sought to encourage the market by requiring that projects it funded include substantial U.S.-made content. Many economists and foreign governments decried the provision as inefficient and jingoistic. Yet it enabled United Streetcar in Clackamas, Ore., to begin the first production of streetcars in America in more than half a century. "The buy-America provision took the risk factor out, so we could make the start-up investment," said Chandra Brown, United Streetcar's president.
Foreigners, too, can be lured into making in the United States more of what they sell to Americans and to the rest of the world. Because of the recent decline in the dollar and the slow growth in American wages, it's become cheaper in many cases to manufacture in the United States than in Germany or Japan. As a result, Volkswagen is building a plant in Tennessee, and BMW's factory in South Carolina has become the largest exporter of U.S.-built cars. The federal government might also attract and keep manufacturers by matching the investment subsidies and tax breaks that China and Singapore offer.
Lowering the value of the dollar would preserve and expand the U.S. manufacturing base by making homemade goods a better buy for Americans and foreigners. The dollar is estimated to be overvalued against the Chinese renminbi by at least 20 percent. Reducing that to zero, according to the Peterson Institute for International Economics in Washington, would create about a half-million well-paying American jobs, mainly in manufacturing.
 
KNOWLEDGE, SKILL, AND DESIRE
But something more is needed to assure a vibrant future for American manufacturing: a skilled workforce. That's a scarce commodity these days, even in the County. "Every kid who grows up here wants to go to college and work on Wall Street," said Wise Machine's Garrard, "not follow their fathers into AK Steel."
A local High School has a highly regarded vocational education program that teaches the latest in manufacturing techniques. Almost all of its graduates find jobs. But there are only 43 participants--more students choose training to become beauticians than machinists. "If we want to replicate the highly skilled German workforce," said Scott Paul, executive director of the Alliance for American Manufacturing, "we need a seamless four-year program that starts in high school and goes through community college or technical schools that prepare students for manufacturing jobs."
That proposal costs money. County Community College conducts extensive training programs for local manufacturers, but demand is down, partly because of cuts in the state funding that picked up much of the cost. Nationally, only 0.17 percent of America's GDP is invested in worker training. Germany spends nearly five times as much.
If skills are an obstacle, more money can help. But if it's desire that's lacking, all bets are off. In the past few decades, as manufacturing's share of the American economy and workforce has slipped precipitously, the perception has grown that U.S. manufacturing has no future. No doubt this has contributed, in turn, to the County youths' tepid desire to pursue a manufacturing career.
Yet in the County, where the surviving manufacturers are showing some spunk, these fears seem premature. "There will always be a manufacturing sector in the United States--there has to be one," said Frank Vargo, NAM's vice president for international economic affairs. "The question is what kind of manufacturing. And that is a matter for policymakers to shape."
In any event, there is reason to hope. "The future is still in our hands," said Kent Hughes, director of the program on America and the global economy at the Woodrow Wilson International Center for Scholars in Washington, "if we don't sit on them."



Complying with the Made in USA Standard [PDF]

Introduction

The Federal Trade Commission (FTC) is charged with preventing deception and unfairness in the marketplace. The FTC Act gives the Commission the power to bring law enforcement actions against false or misleading claims that a product is of U.S. origin. Traditionally, the Commission has required that a product advertised as Made in USA be "all or virtually all" made in the U.S. After a comprehensive review of Made in USA and other U.S. origin claims in product advertising and labeling, the Commission announced in December 1997 that it would retain the "all or virtually all" standard. The Commission also issued an Enforcement Policy Statement on U.S. Origin Claims to provide guidance to marketers who want to make an unqualified Made in USA claim under the "all or virtually all" standard and those who want to make a qualified Made in USA claim.

This publication provides additional guidance about how to comply with the "all or virtually all" standard. It also offers some general information about the U.S. Customs Service’s requirement that all products of foreign origin imported into the U.S. be marked with the name of the country of origin.

This publication is the Federal Trade Commission staff’s view of the law’s requirements. It is not binding on the Commission. The Enforcement Policy Statement issued by the FTC is at the end of the publication.

Basic Information About Made In USA Claims

Must U.S. content be disclosed on products sold in the U.S.?

U.S. content must be disclosed on automobiles and textile, wool, and fur products. There’s no law that requires most other products sold in the U.S. to be marked or labeled Made in USA or have any other disclosure about their amount of U.S. content. However, manufacturers and marketers who choose to make claims about the amount of U.S. content in their products must comply with the FTC’s Made in USA policy.

What products does the FTC’s Made in USA policy apply to?

The policy applies to all products advertised or sold in the U.S., except for those specifically subject to country-of-origin labeling by other laws. Other countries may have their own country-of-origin marking requirements. As a result, exporters should determine whether the country to which they are exporting imposes such requirements.

What kinds of claims does the Enforcement Policy Statement apply to?

The Enforcement Policy Statement applies to U.S. origin claims that appear on products and labeling, advertising, and other promotional materials. It also applies to all other forms of marketing, including marketing through digital or electronic mechanisms, such as Internet or e-mail.

A Made in USA claim can be express or implied.

Examples of express claims: Made in USA. "Our products are American-made." "USA."

In identifying implied claims, the Commission focuses on the overall impression of the advertising, label, or promotional material. Depending on the context, U.S. symbols or geographic references (for example, U.S. flags, outlines of U.S. maps, or references to U.S. locations of headquarters or factories) may convey a claim of U.S. origin either by themselves, or in conjunction with other phrases or images.

Example: A company promotes its product in an ad that features a manager describing the "true American quality" of the work produced at the company’s American factory. Although there is no express representation that the company’s product is made in the U.S., the overall — or net — impression the ad is likely to convey to consumers is that the product is of U.S. origin.

Brand names and trademarks

Ordinarily, the Commission will not consider a manufacturer or marketer’s use of an American brand name or trademark by itself as a U.S. origin claim. Similarly, the Commission is not likely to interpret the mere listing of a company’s U.S. address on a package label in a non-prominent way as a claim of U.S. origin.

Example: A product is manufactured abroad by a well-known U.S. company. The fact that the company is headquartered in the U.S. also is widely known. Company pamphlets for its foreign-made product prominently feature its brand name. Assuming that the brand name does not specifically denote U.S. origin (that is, the brand name is not "Made in America, Inc."), using the brand name by itself does not constitute a claim of U.S. origin.

Representations about entire product lines

Manufacturers and marketers should not indicate, either expressly or implicitly, that a whole product line is of U.S. origin ("Our products are made in USA") when only some products in the product line are made in the U.S. according to the "all or virtually all" standard.

Does the FTC pre-approve Made in USA claims?

The Commission does not pre-approve advertising or labeling claims. A company doesn’t need approval from the Commission before making a Made in USA claim. As with most other advertising claims, a manufacturer or marketer may make any claim as long as it is truthful and substantiated.

The Standard For Unqualified Made In USA Claims

What is the standard for a product to be called Made in USA without qualification?

For a product to be called Made in USA, or claimed to be of domestic origin without qualifications or limits on the claim, the product must be "all or virtually all" made in the U.S. The term "United States," as referred to in the Enforcement Policy Statement, includes the 50 states, the District of Columbia, and the U.S. territories and possessions.

What does "all or virtually all" mean?

"All or virtually all" means that all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no — or negligible — foreign content.

What substantiation is required for a Made in USA claim?

When a manufacturer or marketer makes an unqualified claim that a product is Made in USA, it should have — and rely on — a "reasonable basis" to support the claim at the time it is made. This means a manufacturer or marketer needs competent and reliable evidence to back up the claim that its product is "all or virtually all" made in the U.S.

What factors does the Commission consider to determine whether a product is "all or virtually all" made in the U.S.?

The product’s final assembly or processing must take place in the U.S. The Commission then considers other factors, including how much of the product’s total manufacturing costs can be assigned to U.S. parts and processing, and how far removed any foreign content is from the finished product. In some instances, only a small portion of the total manufacturing costs are attributable to foreign processing, but that processing represents a significant amount of the product’s overall processing. The same could be true for some foreign parts. In these cases, the foreign content (processing or parts) is more than negligible, and, as a result, unqualified claims are inappropriate.

Example: A company produces propane barbecue grills at a plant in Nevada. The product’s major components include the gas valve, burner and aluminum housing, each of which is made in the U.S. The grill’s knobs and tubing are imported from Mexico. An unqualified Made in USA claim is not likely to be deceptive because the knobs and tubing make up a negligible portion of the product’s total manufacturing costs and are insignificant parts of the final product.

Example: A table lamp is assembled in the U.S. from American-made brass, an American-made Tiffany-style lampshade, and an imported base. The base accounts for a small percent of the total cost of making the lamp. An unqualified Made in USA claim is deceptive for two reasons: The base is not far enough removed in the manufacturing process from the finished product to be of little consequence and it is a significant part of the final product.

What items should manufacturers and marketers include in analyzing the percentage of domestic content in a particular product?

Manufacturers and marketers should use the cost of goods sold or inventory costs of finished goods in their analysis. Such costs generally are limited to the total cost of all manufacturing materials, direct manufacturing labor, and manufacturing overhead.

Should manufacturers and marketers rely on information from American suppliers about the amount of domestic content in the parts, components, and other elements they buy and use for their final products?

If given in good faith, manufacturers and marketers can rely on information from suppliers about the domestic content in the parts, components, and other elements they produce. Rather than assume that the input is 100 percent U.S.-made, however, manufacturers and marketers would be wise to ask the supplier for specific information about the percentage of U.S. content before they make a U.S. origin claim.

Example: A company manufactures food processors in its U.S. plant, making most of the parts, including the housing and blade, from U.S. materials. The motor, which constitutes 50 percent of the food processor’s total manufacturing costs, is bought from a U.S. supplier. The food processor manufacturer knows that the motor is assembled in a U.S. factory. Even though most of the parts of the food processor are of U.S. origin, the final assembly is in the U.S., and the motor is assembled in the U.S., the food processor is not considered "all or virtually all" American-made if the motor itself is made of imported parts that constitute a significant percentage of the appliance’s total manufacturing cost. Before claiming the product is Made in USA, this manufacturer should look to its motor supplier for more specific information about the motor’s origin.

Example: On its purchase order, a company states: "Our company requires that suppliers certify the percentage of U.S. content in products supplied to us. If you are unable or unwilling to make such certification, we will not purchase from you." Appearing under this statement is the sentence, "We certify that our ___ have at least ___% U.S. content," with space for the supplier to fill in the name of the product and its percentage of U.S. content. The company generally could rely on a certification like this to determine the appropriate country-of-origin designation for its product.

How far back in the manufacturing process should manufacturers and marketers look?

To determine the percentage of U.S. content, manufacturers and marketers should look back far enough in the manufacturing process to be reasonably sure that any significant foreign content has been included in their assessment of foreign costs. Foreign content incorporated early in the manufacturing process often will be less significant to consumers than content that is a direct part of the finished product or the parts or components produced by the immediate supplier.

Example: The steel used to make a single component of a complex product (for example, the steel used in the case of a computer’s floppy drive) is an early input into the computer’s manufacture, and is likely to constitute a very small portion of the final product’s total cost. On the other hand, the steel in a product like a pipe or a wrench is a direct and significant input. Whether the steel in a pipe or wrench is imported would be a significant factor in evaluating whether the finished product is "all or virtually all" made in the U.S.

Are raw materials included in the evaluation of whether a product is "all or virtually all" made in the U.S.?

It depends on how much of the product’s cost the raw materials make up and how far removed from the finished product they are.

Example: If the gold in a gold ring is imported, an unqualified Made in USA claim for the ring is deceptive. That’s because of the significant value the gold is likely to represent relative to the finished product, and because the gold — an integral component — is only one step back from the finished article. By contrast, consider the plastic in the plastic case of a clock radio otherwise made in the U.S. of U.S.-made components. If the plastic case was made from imported petroleum, a Made in USA claim is likely to be appropriate because the petroleum is far enough removed from the finished product, and is an insignificant part of it as well.

Qualified Claims

What is a qualified Made in USA claim?

A qualified Made in USA claim describes the extent, amount or type of a product’s domestic content or processing; it indicates that the product isn’t entirely of domestic origin.

Example: "60% U.S. content." "Made in USA of U.S. and imported parts." "Couch assembled in USA from Italian Leather and Mexican Frame."

When is a qualified Made in USA claim appropriate?

A qualified Made in USA claim is appropriate for products that include U.S. content or processing but don’t meet the criteria for making an unqualified Made in USA claim. Because even qualified claims may imply more domestic content than exists, manufacturers or marketers must exercise care when making these claims. That is, avoid qualified claims unless the product has a significant amount of U.S. content or U.S. processing. A qualified Made in USA claim, like an unqualified claim, must be truthful and substantiated.

Example: An exercise treadmill is assembled in the U.S. The assembly represents significant work and constitutes a "substantial transformation" (a term used by the U.S. Customs Service). All of the treadmill’s major parts, including the motor, frame, and electronic display, are imported. A few of its incidental parts, such as the handle bar covers, the plastic on/off power key, and the treadmill mat, are manufactured in the U.S. Together, these parts account for approximately three percent of the total cost of all the parts. Because the value of the U.S.-made parts is negligible compared to the value of all the parts, a claim on the treadmill that it is "Made in USA of U.S. and Imported Parts" is deceptive. A claim like "Made in U.S. from Imported Parts" or "Assembled in U.S.A." would not be deceptive.

U.S. origin claims for specific processes or parts

Claims that a particular manufacturing or other process was performed in the U.S. or that a particular part was manufactured in the U.S. must be truthful, substantiated, and clearly refer to the specific process or part, not to the general manufacture of the product, to avoid implying more U.S. content than exists.

Manufacturers and marketers should be cautious about using general terms, such as "produced," "created" or "manufactured" in the U.S. Words like these are unlikely to convey a message limited to a particular process. Additional qualification probably is necessary to describe a product that is not "all or virtually all" made in the U.S.

In addition, if a product is of foreign origin (that is, it has been substantially transformed abroad), manufacturers and marketers also should make sure they satisfy Customs’ markings statute and regulations that require such products to be marked with a foreign country of origin. Further, Customs requires the foreign country of origin to be preceded by "Made in," "Product of," or words of similar meaning when any city or location that is not the country of origin appears on the product.

Example: A company designs a product in New York City and sends the blueprint to a factory in Finland for manufacturing. It labels the product "Designed in USA — Made in Finland." Such a specific processing claim would not lead a reasonable consumer to believe that the whole product was made in the U.S. The Customs Service requires the product to be marked "Made in," or "Product of" Finland since the product is of Finnish origin and the claim refers to the U.S. Examples of other specific processing claims are: "Bound in U.S. — Printed in Turkey." "Hand carved in U.S. — Wood from Philippines." "Software written in U.S. — Disk made in India." "Painted and fired in USA. Blanks made in (foreign country of origin)."

Example: A company advertises its product, which was invented in Seattle and manufactured in Bangladesh, as "Created in USA." This claim is deceptive because consumers are likely to interpret the term "Created" as Made in USA — an unqualified U.S. origin claim.

Example: A computer imported from Korea is packaged in the U.S. in an American-made corrugated paperboard box containing only domestic materials and domestically produced expanded rigid polystyrene plastic packing. Stating Made in USA on the package would deceive consumers about the origin of the product inside. But the company could legitimately make a qualified claim, such as "Computer Made in Korea — Packaging Made in USA."

Example: The Acme Camera Company assembles its cameras in the U.S. The camera lenses are manufactured in the U.S., but most of the remaining parts are imported. A magazine ad for the camera is headlined "Beware of Imported Imitations" and states "Other high-end camera makers use imported parts made with cheap foreign labor. But at Acme Camera, we want only the highest quality parts for our cameras and we believe in employing American workers. That’s why we make all of our lenses right here in the U.S." This ad is likely to convey that more than a specific product part (the lens) is of U.S. origin. The marketer should be prepared to substantiate the broader U.S. origin claim conveyed to consumers viewing the ad.

Comparative Claims

Comparative claims should be truthful and substantiated, and presented in a way that makes the basis for comparison clear (for example, whether the comparison is to another leading brand or to a previous version of the same product). They should truthfully describe the U.S. content of the product and be based on a meaningful difference in U.S. content between the compared products.

Example: An ad for cellular phones states "We use more U.S. content than any other cellular phone manufacturer." The manufacturer assembles the phones in the U.S. from American and imported components and can substantiate that the difference between the U.S. content of its phones and that of the other manufacturers’ phones is significant. This comparative claim is not deceptive.

Example: A product is advertised as having "twice as much U.S. content as before." The U.S. content in the product has been increased from 2 percent in the previous version to 4 percent in the current version. This comparative claim is deceptive because the difference between the U.S. content in the current and previous version of the product are insignificant.

Assembled in USA Claims

A product that includes foreign components may be called "Assembled in USA" without qualification when its principal assembly takes place in the U.S. and the assembly is substantial. For the "assembly" claim to be valid, the product’s last "substantial transformation" also should have occurred in the U.S. That’s why a "screwdriver" assembly in the U.S. of foreign components into a final product at the end of the manufacturing process doesn’t usually qualify for the "Assembled in USA" claim.

Example: A lawn mower, composed of all domestic parts except for the cable sheathing, flywheel, wheel rims and air filter (15 to 20 percent foreign content) is assembled in the U.S. An "Assembled in USA" claim is appropriate.

Example: All the major components of a computer, including the motherboard and hard drive, are imported. The computer’s components then are put together in a simple "screwdriver" operation in the U.S., are not substantially transformed under the Customs Standard, and must be marked with a foreign country of origin. An "Assembled in U.S." claim without further qualification is deceptive.

The FTC and The Customs Service

What is the U.S. Customs Service’s jurisdiction over country-of-origin claims?

The Tariff Act gives Customs and the Secretary of the Treasury the power to administer the requirement that imported goods be marked with a foreign country of origin (for example, "Made in Japan").

When an imported product incorporates materials and/or processing from more than one country, Customs considers the country of origin to be the last country in which a "substantial transformation" took place. Customs defines "substantial transformation" as a manufacturing process that results in a new and different product with a new name, character, and use that is different from that which existed before the change. Customs makes country-of-origin determinations using the "substantial transformation" test on a case-by-case basis. In some instances, Customs uses a "tariff shift" analysis, comparable to "substantial transformation," to determine a product’s country of origin.

What is the interaction between the FTC and Customs regarding country-of-origin claims?

Even if Customs determines that an imported product does not need a foreign country-of-origin mark, it is not necessarily permissible to promote that product as Made in USA. The FTC considers additional factors to decide whether a product can be advertised or labeled as Made in USA.

Manufacturers and marketers should check with Customs to see if they need to mark their products with the foreign country of origin. If they don’t, they should look at the FTC’s standard to check if they can properly make a Made in USA claim.

The FTC has jurisdiction over foreign origin claims on products and in packaging that are beyond the disclosures required by Customs (for example, claims that supplement a required foreign origin marking to indicate where additional processing or finishing of a product occurred).

The FTC also has jurisdiction over foreign origin claims in advertising and other promotional materials. Unqualified U.S. origin claims in ads or other promotional materials for products that Customs requires a foreign country-of-origin mark may mislead or confuse consumers about the product’s origin. To avoid misleading consumers, marketers should clearly disclose the foreign manufacture of a product.

Example: A television set assembled in Korea using an American-made picture tube is shipped to the U.S. The Customs Service requires the television set to be marked "Made in Korea" because that’s where the television set was last "substantially transformed." The company’s World Wide Web page states "Although our televisions are made abroad, they always contain U.S.-made picture tubes." This statement is not deceptive. However, making the statement "All our picture tubes are made in the USA" — without disclosing the foreign origin of the television’s manufacture — might imply a broader claim (for example, that the television set is largely made in the U.S.) than could be substantiated. That is, if the statement and the entire ad imply that any foreign content or processing is negligible, the advertiser must substantiate that claim or net impression. The advertiser in this scenario would not be able to substantiate the implied Made in USA claim because the product was "substantially transformed" in Korea.

Other Statutes

What are the requirements of other federal statutes relating to country-of-origin determinations?

Textile Fiber Products Identification Act and Wool Products Labeling Act — Require a Made in USA label on most clothing and other textile or wool household products if the final product is manufactured in the U.S. of fabric that is manufactured in the U.S., regardless of where materials earlier in the manufacturing process (for example, the yarn and fiber) came from. Textile products that are imported must be labeled as required by the Customs Service. A textile or wool product partially manufactured in the U.S. and partially manufactured in another country must be labeled to show both foreign and domestic processing.

On a garment with a neck, the country of origin must be disclosed on the front of a label attached to the inside center of the neck — either midway between the shoulder seams or very near another label attached to the inside center of the neck. On a garment without a neck, and on other kinds of textile products, the country of origin must appear on a conspicuous and readily accessible label on the inside or outside of the product.

Catalogs and other mail order promotional materials for textile and wool products, including those disseminated on the Internet, must disclose whether a product is made in the U.S., imported or both.

The Fur Products Labeling Act requires the country of origin of imported furs to be disclosed on all labels and in all advertising. For copies of the Textile, Wool or Fur Rules and Regulations, or the new business education guide on labeling requirements, call the FTC’s Consumer Response Center
(202-382-4357). Or visit the FTC online at www.ftc.gov. Click on Consumer Protection.

American Automobile Labeling Act — Requires that each automobile manufactured on or after October 1, 1994, for sale in the U.S. bear a label disclosing where the car was assembled, the percentage of equipment that originated in the U.S. and Canada, and the country of origin of the engine and transmission. Any representation that a car marketer makes that is required by the AALA is exempt from the Commission’s policy. When a company makes claims in advertising or promotional materials that go beyond the AALA requirements, it will be held to the Commission’s standard. For more information, call the Consumer Programs Division of the National Highway Traffic Safety Administration (202-366-0846).

Buy American Act — Requires that a product be manufactured in the U.S. of more than 50 percent U.S. parts to be considered Made in USA for government procurement purposes. For more information, review the Buy American Act at 41 U.S.C. §§ 10a-10c, the Federal Acquisition Regulations at 48 C.F.R. Part 25, and the Trade Agreements Act at 19 U.S.C. §§ 2501-2582.

What To Do About Violations

What if I suspect noncompliance with the FTC’s Made in USA standard or other country-of-origin mislabeling?

Information about possible illegal activity helps law enforcement officials target companies whose practices warrant scrutiny. If you suspect noncompliance, contact the Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, DC 20580; (202) 326-2996 or send an e-mail to MUSA@ftc.gov. If you know about import or export fraud, call Customs’ toll-free Commercial Fraud Hotline, 1-800-ITS-FAKE. Examples of fraudulent practices involving imports include removing a required foreign origin label before the product is delivered to the ultimate purchaser (with or without the improper substitution of a Made in USA label) and failing to label a product with a required country of origin.

You also can contact your state Attorney General and your local Better Business Bureau to report a company. Or you can refer your complaint to the National Advertising Division (NAD) of the Council of Better Business Bureaus by calling (212) 754-1320. NAD handles complaints about the truth and accuracy of national advertising. You can reach the Council of Better Business Bureaus on the web at adweb.com/adassoc17.html.

Finally, the Lanham Act gives any person (such as a competitor) who is damaged by a false designation of origin the right to sue the party making the false claim. Consult a lawyer to see if this private right of action is an appropriate course of action for you.

For More Information

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Your Opportunity to Comment

The National Small Business Ombudsman and 10 Regional Fairness Boards collect comments from small businesses about federal compliance and enforcement activities. Each year, the Ombudsman evaluates the conduct of these activities and rates each agency's responsiveness to small businesses. Small businesses can comment to the Ombudsman without fear of reprisal. To comment, call toll-free 1-888-REGFAIR (1-888-734-3247) or go to www.sba.gov/ombudsman.


                 2022
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