UNITED STATES OF AMERICA 

FEDERAL TRADE COMMISSION 

WASHINGTON, D.C. 20580 

Office of the Secretary 

April 12, 2018 

Rick Helfenbein 

American Apparel & Footwear Association 

RE: In the Matter of Bollman Hat Company and SaveAnAmericanJob, LLC, 

jointly doing business as American Made Matters, Matter No. 172 3197 

Dear Mr. Helfenbein: 

Thank you for commenting on the Federal Trade Commission’s proposed consent 

agreement in the above-referenced proceeding. The Commission has considered your comment 

and placed it on the public record pursuant to Rule 4.9(b)(6)(ii) of the Commission’s Rules of 

Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

As you acknowledge, your comment does not raise concerns about or recommend 

changes to the proposed order in this matter. Instead, your comment requests that the 

Commission clarify how manufacturers can make “Made in USA” claims consistent with Section 

5 of the FTC Act, 15 U.S.C. § 45(a). Specifically, you propose that the FTC state that marketers 

may make unqualified “Made in USA” claims if they can substantiate that products are 

substantially transformed and undergo a 51% value-add in the United States. 

The Commission’s Enforcement Policy Statement on U.S. Origin Claims (the “Policy 

Statement”) is based on Section 5 of the FTC Act.1 Section 5 prohibits unfair or deceptive acts 

or practices in or affecting commerce. An act or practice is deceptive if it is likely to mislead 

consumers acting reasonably under the circumstances and is material; that is, likely to affect a 

consumer’s decision to purchase or use the advertised product or service.2 A claim need not 

mislead all – or even most – consumers to be deceptive under the FTC Act. Rather, the claim 

need only deceive some consumers acting reasonably.3 

1 Federal Trade Commission, Issuance of Enforcement Policy Statement on “Made in USA” and 

Other U.S. Origin Claims, 62 Fed. Reg. 63756, 63766 (Dec. 2, 1997), available at 

http://www.ftc.gov/os/fedreg/1997/december/971202madeinusa.pdf. 

2 In re Novartis Corp., 127 F.T.C. 580, 679 (1999), aff’d and enforced, 223 F.3d 783 (D.C. Cir. 

2000); In re Stouffer Foods Corp., 118 F.T.C. 746, 798 (1994); In re Kraft, Inc., 114 F.T.C. 40, 

120 (1991), aff’d and enforced, 970 F.2d 311 (7th Cir. 1992), cert. denied, 113 S. Ct. 1254 

(1993). 

3 See FTC Policy Statement on Deception, 103 F.T.C. 174 (1984) (appended to In re Cliffdale 

Assocs., Inc., 103 F.T.C. 110, 177 n.20 (1984) (“A material practice that misleads a significant 

minority of reasonable consumers is deceptive.”)); see also FTC v. Amy Travel Serv., Inc., 875 

F.2d 564, 572 (7th Cir. 1989) (“[T]he FTC need not prove that every consumer was injured.”). 
 

 

 

 

 

 

The Policy Statement provides guidance on how the Commission applies Section 5 to the 

use of “Made in USA” and other U.S.-origin claims in advertising and labeling. In particular, the 

Policy Statement provides that when a marketer makes an unqualified “Made in USA” claim, the 

marketer should – at the time of the representation – possess and rely upon a reasonable basis 

establishing that the product is in fact “all or virtually all” made in the United States. A 

representation may be either express (e.g., “Made in USA” or “our products are Americanmade”) or implied. 

The Policy Statement further explains that, for a product to be considered “all or virtually 

all” made in the United States, the final assembly or processing of the item must take place in the 

U.S. Beyond this minimum threshold, the Commission may consider other factors, such as “the 

portion of the product’s total manufacturing costs attributable to U.S. parts and processing; and 

how far removed from the finished product any foreign content is.”4 Because, as you note, the 

Policy Statement is tied to consumer perception, it does not specify a particular percentage of 

costs that must be attributable to U.S. parts or processing to substantiate an unqualified claim. 

Specifically, as the Commission has noted, even when only a small portion of total 

manufacturing costs is attributable to foreign processing or foreign parts, if that processing or 

those parts are significant to the overall product, “foreign content is more than negligible, and, as 

a result, unqualified claims are inappropriate.”5 

The Commission based the Policy Statement on thousands of comments it received in 

1997, as well as a survey conducted in 1995. The 1995 survey found that roughly 30% of 

consumers would find an unqualified “Made in USA” claim for a product with 70% domestic 

origin misleading. For a product with 50% domestic origin, 46% of consumers disagreed with 

an unqualified claim. Recent nonpublic testing confirms these results. 

Your comment does not include consumer perception evidence demonstrating that a 

substantial transformation plus 51% U.S.-value added standard would not be deceptive. Indeed, 

based on the record before us, it appears that many consumers would not consider a product 

substantially transformed plus 51% U.S.-value added to be “Made in USA.” However, if 

additional testing were to show a change in perception, we would reevaluate. 

Nonetheless, the FTC understands the importance of advertising domestic content and 

processes. Therefore, FTC staff is available to work with businesses to discuss claims that serve 

4 Id. at § IV. Regarding remoteness of foreign content, a recent study produced to the FTC by 

members of the jewelry industry seeking to make unqualified U.S.-origin claims examined 

consumer perception of such claims for products containing imported raw materials. That study 

found that more than half of consumers may be deceived by U.S.-origin claims for products 

containing components or natural resources that originate outside the United States. See Letter 

to C. Gardner (Sept. 9, 2014), available at: 

https://www.ftc.gov/system/files/documents/closing_letters/made-usa/140909madeisusajvc.pdf. 

5 FTC, Complying with the Made in USA Standard (Dec. 1998), available at 

https://www.ftc.gov/tips-advice/business-center/guidance/complying-made-usa-standard. 
 

the dual purposes of conveying non-deceptive information to consumers and highlighting work 

done in the U.S. 

In your comment, you do not propose any revisions to the draft complaint or the consent 

agreement. Therefore, after considering your comment, the Commission has determined that the 

relief set forth in the consent agreement is appropriate and sufficient to remedy the violations 

alleged in the complaint. At this time, the Commission has determined that the public interest 

would best be served by issuing the Decision and Order in final form without modification. The 

final Decision and Order and other relevant materials are available on the Commission’s website 

at http://www.ftc.gov. It helps the Commission’s analysis to hear from a variety of sources in its 

work, and we thank you again for your comment. 

By direction of the Commission. 

Donald S. Clark 

Secretary