Lawmakers Call on the FTC to Strengthen Made in USA Labeling Enforcement

Getty Images

As the holiday shopping season kicks off, strict enforcement of Made in USA advertising rules would honor U.S. manufacturers’ investments in the local economy and restore consumer confidence.  

Reps. Frank Pallone Jr. (D-N.J.) and Jan Schakowsky (D-Ill.) wrote to Federal Trade Commission (FTC) Chairman Joseph Simons on Thursday, urging the FTC to follow through with its proposal to strengthen its Made in USA enforcement mechanisms and seek civil penalties against companies that deceptively claim their goods are Made in USA.

At a time when many American manufacturers are still finding their footing in a radically changed and volatile retail landscape, while simultaneously grappling with surging imports, assurances that the FTC will defend the integrity of Made in USA labeling could help restore manufacturers’ confidence that their investment in local jobs will receive the credit it deserves.  

“The Made in USA label empowers consumers to make more informed purchasing decisions and rewards American manufacturers that invest, employ, innovate, and produce in the United States, including many small businesses that can gain a competitive edge based on country of origin,” Pallone and Schakowsky write in their letter to the FTC. “This proposed rule is an encouraging sign of the FTC’s commitment to meaningful consumer protection through use of its rulemaking authorities.”

Pallone and Schakowsky aren’t alone in calling on the FTC to implement its Made in USA proposal. Sens. Tammy Baldwin (D-Wis.), Sherrod Brown (D-Ohio), Richard Blumenthal (D-Conn.) and Chris Murphy (D-Conn.) wrote to the agency in September to urge strong Made in USA enforcement.

Unquestionably, Made in USA labeling is a powerful asset. Nearly eight in 10 Americans would rather purchase a Made in America product than an import, according to a 2015 Consumer Reports survey. Indeed, consumers so value Made in USA goods that more than 60% of the consumers surveyed said that they were willing to pay 10% more to purchase Made in America items.

But there’s a major hitch. Importers all too often exploit the patriotic appeal and promise of quality that may be conferred by a “Made in America” label by falsely claiming it.

In 2018, several companies were particularly flagrant in their abuse of Made in USA labeling. But the FTC didn’t do anything more than issue a strongly worded warning; the companies faced no real consequences for their cheating.

Since then, there have been promising signs that the FTC is getting serious about enforcement. In 2019, the FTC issued a $1 million penalty on Williams Sonoma for falsely advertising their entirely imported line of Goldtouch Bakeware line as “made in the USA.” Financial penalties such as this could serve as a powerful model for future Made in USA labeling violation outcomes.

“Rebuilding consumer trust in the label requires strong enforcement and meaningful consequences for those who deceive consumers with misleading use of the label,” Pallone and Schakowsky state. “Unfortunately, too often the FTC has refused to take strong enforcement actions, showing potential violators that they can misuse the Made in USA label with impunity.  We appreciate the clarity provided by the proposed rule that violators are subject to civil penalties and encourage the FTC to include this provision in the final rule.  Such action would show that the FTC will use all the available tools to deter potential violators and make repeat violations less likely.”

The need for the FTC’s action is especially critical as we enter a holiday shopping season that’s largely online, where country of origin labeling can be especially difficult to track down. The FTC’s extension of the proposed rule to online Made in USA advertising as well — something that Pallone and Schakowsky urge in their letter and that Baldwin and Rick Scott (R-Fla.) have also aimed to shore up — could offer a vital boost to U.S. manufacturers and makers.

While we’re on the topic of Made in USA shopping, if you have a Made in America item that shoots to the top of your holiday gift list every year, we want to know about it! Email us at giftguide@aamfg.org to have your gift idea possibly featured in our 2020 Made in America Gift Guide.