As of late, there have been numerous conversations surrounding how products are labeled, especially in relation to “Made in USA” verbiage. Perhaps you’ve seen it on a brand’s website or even a product itself. Most people think that products with this label are made from start to finish in the United States with nothing outsourced, but is that really the case?

Ahead, we spoke with business owners about what “Made in USA” means, whether or not there are actual benefits for the manufacturer and consumer, and what shoppers should know the next time they see this label.

What Does the “Made In USA” Label Really Mean?

Casual clothing detail fashion background made in the USAPGIAM/GETTY IMAGES

According to the Federal Trade Commission, “Made in USA” means “all or virtually all” of the product has been made in the USA, which means, “the 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. That is, the product should contain no — or negligible — foreign content.”

Some brands you may recognize as being made in America include Crayola, KitchenAid, Igloo and Pyrex.

What constitutes “virtually all” made in the USA?

To determine whether a product is “virtually all” made in the USA, the FTC figures out the product’s total manufacturing costs which can be assigned to U.S. parts and processing, how far removed any foreign content is from the finished product and the importance of the foreign content to the product’s form or function.

There’s no specific percentage of a product that needs to be American-made to get the label. That said, according to AllAmerican.org, a significant percentage of the manufacturing cost must come from U.S. parts and processing.

For example, according to the brand’s website, New Balance has a made-in-America collection with a 70 percent domestic value.

“Made in USA” vs. “Assembled in USA”: What’s the Difference?

The big difference between “Made in USA” and “Assembled in USA” is how much of the process involves the United States.

“‘Made in USA’ usually means the full process, from materials to final product, was made right here in the US,” says Whitney Surane, founder and CEO of Madly Wish. “‘Assembled in USA’ typically just means the assembly took place here, but the pieces were made elsewhere.”

According to the FTC, for a product to be labeled as “Assembled in the USA,” its last “substantial transformation” should have occurred in the U.S. This means that significant and meaningful changes need to have occurred in the U.S. during the process.

Can “Made in USA” Claims Be Misleading?

Yes, “Made in USA” claims can be misleading. In some cases, they lead consumers to think that a product was made from start to finish in the U.S., when that’s not always true.

Do “Made in USA” Products Cost More?

For the most part, products made in the USA will cost more. This is because labor in the U.S. is more expensive than in other parts of the world. Since labor is more expensive, the price of a product will typically increase to cover that cost.

Products Being “Made In USA”: Pros and Cons

When it comes to products being made in America there are some pros and cons to consider:

Pros:

  • Shopping for American-made products can support the U.S. economy and show patriotism.
  • It can promote better working conditions and fair wages.
  • It can be better for the environment and more sustainable since it’s a shorter supply chain.
  • Sometimes (though not always), products can be of higher quality when made in America compared to being outsourced.

Cons:

  • Products are often more expensive due to higher production costs.
  • There’s no pre-approval process for a company to label a product as made in America which could lead to consumer deception (products made in America aren’t always better, contrary to popular belief).
  • There can be less variety of products since the manufacturing process is typically at a smaller scale.

FAQ

Does “Made in USA” guarantee quality?

This is a tricky question because it really depends on the brand and company. “The label alone isn’t a substitute for good design and manufacturing practices,” says Ravi Sawhney, founder and CEO of RKS Design. “Many startups could be making poor-quality products—there’s no promise made.”

In the end, it falls on the consumer to do their research into the quality of any given brand of products. Surane, the CEO of a small business that specializes in handcrafted linen products, Madly Wish, says, “I think if you’re using that label, you should be able to stand behind it with transparency and pride. That’s how I approach it. My materials are intentionally chosen for their quality, but the hands and heart behind every piece are here at home.”

How do you verify a product is actually made in America?

According to AllAmerican.org, the Federal Trade Commission doesn’t approve the use of this phrase before a company slaps it on their products. It is up to the individual company to determine compliance with FTC regulations and use “made in the USA” verbiage.

That said, you’ll want to look at the packaging, website and other marketing materials to see if the brand or company has any insights into their production and manufacturing process.

“It’s hard to imagine a real company would falsely advertise this, given the repercussions that could fall on them by consumer watch groups or the FTC,” says Sawhney. But just because it’s rare, doesn’t mean it doesn’t happen, which is why you can report any suspected violations to the FTC.

Transparency is key in helping gain trust with consumers and oftentimes the brands who are actually doing it the right way have photos, videos and lots of information about their “made in America” or “made in USA” label.

About the Experts

  • Whitney Surane, is the founder and CEO of Madly Wish, a brand dedicated to crafting handcrafted linen products.

  • Ravi Sawhney, founder and CEO of RKS Design.

Sources

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Casey Clark
Casey Clark is a freelance writer from New York City who specializes in commerce writing with emphasis on beauty, food, and lifestyle content. Casey's work has been featured in Women's Health, Allure, Byrdie, Cosmopolitan, etc. When she's not writing, you can find her swatching the latest lipsticks or out to brunch with her girlfriends.
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