A product can be designed, owned, assembled and shipped in the United States and still fail the test for an unqualified "Made in USA" claim. The Federal Trade Commission's standard is that the product is "all or virtually all" made in the US, which it defines as final assembly or processing in the US, all significant processing in the US, and all or virtually all components made and sourced in the US, leaving "no, or negligible, foreign content". One imported part that matters to how the product works is enough to break it. The remedy is almost never to change your supply chain. It is to move from an unqualified claim to a qualified one, which is legal, specific, and takes an afternoon.
What the Commission has done since March
On 6 July 2026 the FTC issued warning letters to seven companies over apparent Made in USA misrepresentations, plus one over a "Made in Texas" claim. The recipients are not household names: A&F Drum Company, Z-Tech Advanced Technologies, Vtron, Helmel Engineering Products, NebTech, Lucky Bar Holdings and My Vape Order, selling drums, industrial laser machinery, coordinate measuring machines and e-cigarettes. Christopher Mufarrige, who directs the FTC's Bureau of Consumer Protection, said the Commission "will hold accountable any company that undermines Americans' trust with misleading or outright false U.S. origin claims."
The same release notes that a March 2026 Executive Order, "Ensuring Truthful Advertising of Products Claiming to be made in America", directed the Commission to prioritise this enforcement. Three months before the letters, an April sweep settled three cases: TouchTunes Music Company put $625,000 towards consumer redress, which the FTC calls the largest for a Made in USA Labeling Rule case to date; Americana Liberty and Three Nations, sellers of flag products, put up $167,743 along with three named principals; and Oak Street Bootmakers put up $75,000.
Oak Street is the instructive one. The FTC alleged the uppers were produced in the Dominican Republic, the outsoles sourced from Brazil, and the components shipped to the US for assembly, with the bottoming sometimes completed back in the Dominican Republic. That is a company that genuinely operated a US assembly step and still could not say "handcrafted 100%" in the United States. Note also that both Oak Street and Americana Liberty had received warning letters the previous July. A letter is a first move, not the end of one.
The test, in four questions
Run these against one SKU, in this order. They follow the factors set out in the FTC's own guidance on complying with the Made in USA standard.
- Does final assembly or processing happen in the US? If no, stop. No unqualified claim is available in any form.
- What percentage of manufacturing cost is foreign? The FTC tells you which number to use: cost of goods sold or inventory cost of finished goods, limited to manufacturing materials, direct manufacturing labour and manufacturing overhead. Not marketing, not shipping, not your margin.
- Is any foreign component essential to how the product works? Cost is not the only test. The FTC's example is a Nevada-assembled watch with an inexpensive Swiss movement: the movement is a small share of cost, but without it the watch cannot tell time, so the unqualified claim is deceptive anyway.
- How far back does the foreign content sit? Imported petroleum that ends up as the plastic case of a US-made clock radio is remote enough to ignore. Imported gold in a gold ring is not, because it is one step from the finished article and carries most of the value.
If questions one to four all come back clean, keep the evidence. The standard for substantiation is a "reasonable basis", meaning competent and reliable evidence, and the obligation is ongoing: the day your supplier switches to an imported sub-component, your claim stops being true even though your marketing copy has not changed.
Four claims that fail, and the versions that hold
| What sellers write | Why it fails | What is defensible |
|---|---|---|
| "Made in USA" on a product with an imported motor worth half the build cost | Foreign content is neither negligible nor remote | "Assembled in USA from US and imported parts" |
| "Made in USA of U.S. and Imported Parts" where US parts are about 3% of parts cost | The FTC's treadmill example: the qualified claim still implies more US content than exists | "Assembled in U.S.A." or "Made in U.S. from Imported Parts" |
| "Created in USA" for a product invented in Seattle and manufactured in Bangladesh | Consumers read "created" as "made", so it is an unqualified origin claim | "Designed in USA, Made in Bangladesh" |
| "Our products are made in USA" across a catalogue where only one line qualifies | Product-line claims must be true of the line | The claim on the qualifying products only, per listing |
Qualified claims have a floor of their own. The FTC's advice is to avoid them "unless the product has a significant amount of U.S. content or U.S. processing", and if you reference "U.S. parts", you have to be able to show those parts are themselves all or virtually all US made.
The sentence for your purchase orders
The FTC's guidance says you may rely in good faith on supplier information about domestic content, and it prints an example of wording that generally supports that reliance. It belongs on your POs verbatim:
"Our company requires suppliers to 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 buy from you." Followed by: "We certify that our ___ have at least ____ % U.S. content."
Assuming 100% because a supplier has a US address is the failure mode. Ask for the number.
Working it on one SKU
Take a canvas tote sold at $60, sewn in North Carolina. The manufacturing cost basis is $18.40: US canvas $6.10, imported webbing handles $2.30, imported zipper $1.05, US thread $0.35, direct labour $6.20, manufacturing overhead $2.40. Foreign content is $3.35, or 18.2% of manufacturing cost. That is not negligible on cost alone, and the zipper fails the essential-function question the same way the Swiss movement does. So the unqualified claim is out. US content is nonetheless substantial and the sewing is real work, so "Made in USA of US and imported parts" is available and honest, and "Assembled in USA" is the conservative fallback. The arithmetic here is ours, using the FTC's stated cost basis.
The claim lives in more places than the label
The Policy Statement covers all marketing, "including marketing through digital or electronic mechanisms, such as Internet, email, or social media", and claims can be implied as easily as stated. A US flag over a product photo, an outline of a US map, or an ad that talks about "true American quality" at "the company's American factory" can convey origin without the words. The Labeling Rule at 16 C.F.R. Part 323 reaches any seal, mark, tag or stamp in online and mail order materials, not just the item in the box. Meanwhile a US brand name by itself, or a US address printed without prominence, is ordinarily not treated as an origin claim.
So the audit is not one field in your product data. It is the listing title, the bullet points, the A+ content, the packaging photograph, the pinned post, and the badge your theme puts in the footer. That is the same sweep we recommended for AI-generated people in Amazon listings, and it sits next to the review-incentive disclosure work in Google's July rule change. If a single supplier switch can invalidate a claim printed in nine places, that is worth adding to the exposure sheet in our platform dependency audit.
The scale of the downside is on the FTC's own case list: a record $3.17 million civil penalty against Williams-Sonoma in April 2024 for violating a Made in USA order, and $2 million against Kubota in January 2024. Those are order violations by large companies, not first offences by small ones. The realistic path for a small seller is the one the letters describe: a warning first, then an action if nothing changes. Which means the window between the two is the entire opportunity, and it is free to use.
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