MADE

in the

An FTC Workshop 

September 26, 2019 · Washington, DC 
OPENING

Andrew Smith

Director, Bureau of Consumer Protection
WELCOME

James Kohm, Associate Director

Division of Enforcement

Bureau of Consumer Protection
The FTC and “Made in 

USA” Claims
U.S. Origin Claims and the FTC:

Authority and Enforcement Policy Statement

Julia Solomon Ensor

Staff Attorney, Division of Enforcement

Bureau of Consumer Protection

Federal Trade Commission

Views expressed today are my own.
Overview

FTC and Advertising Law

The FTC’s Enforcement Policy Statement on 

U.S. Origin Claims (“all or virtually all”)
The FTC’s Statutory Authority 

“Unfair or deceptive acts or practices . . . are 

hereby declared unlawful.”

FTC Act, Section 5

(15 U.S.C. § 45)
FTC Policy Statement on Deception

appended to Cliffdale Assoc., Inc., 103 FTC 110, 174 (1984)

1. A representation, omission, or practice likely to 

mislead

2. Considered from the perspective of the reasonable 

consumer

3. That is material

Advertising that lacks a reasonable basis is deceptive.
Significant Minority

• A claim need not mislead all – or even most – consumers to be deceptive under 

the FTC Act. Rather, the claim need only be likely to deceive some consumers 

acting reasonably.

• A material practice that misleads a significant minority of reasonable 

consumers is deceptive. (Deception Policy Statement, n.20).

• “Significant minority” = as low as 10.5% of consumers, net of control.

– Telebrands Corp., 140 F.T.C. 278, 325 (2005) (10.5%-17.3%).

– Firestone Tire & Rubber Co. v. FTC, 481 F.2d 246, 249 (6th Cir. 1973) (it would 

be “hard to overturn the deception findings of the Commission if the ad . . . 

misled 15% (or 10%) of the buying public”).

– FTC v. John Beck Amazing Profits, LLC, 865 F. Supp. 2d 1052, 1070 n.88 (C.D. 

Cal. 2012) (“evidence showing that 10.5% to 17.3% of copy-test respondents 

took away the message at issue is sufficient to prove the complaint allegation 

that the challenged representation had been made”).
1997 Enforcement Policy Statement 

on U.S. Origin Claims

• Helps marketers comply with Section 5; not a 

rule/not independently enforceable.

• Based on Commission precedent, consumer 

perception testing, and thousands of comments.
1997 Enforcement Policy Statement 

on U.S. Origin Claims

• Unqualified claims: Product must be “all or 

virtually all” made in the USA.

– Final assembly/substantial transformation

– Flexible factors test (costs, position in manufacturing 

chain, importance to form/function of product)

• Qualified claims: Substantial transformation in 

USA without additional processing overseas.
15 U.S.C. § 45a

• 1994 law about “Made in USA” or “Made in 

America” labels.

• Labels must be consistent with FTC’s decisions 

and orders issued pursuant to Section 5.

• Commission may issue rules pursuant to APA 

rulemaking (5 U.S.C. 553).
Enforcement/Compliance Program

• Business education: presentations and informal staff 

feedback to any company that seeks it

• Business counseling: for companies that try to comply but 

make mistakes or misunderstand the Policy Statement, 

counsel into compliance and issue closing letters

• Targeted enforcement: administrative or federal court 

litigation against egregious offenders or companies that 

refuse to work with us

Priority = help companies find ways to promote the good 

work they are doing in the USA without deceiving 

consumers in the process.
Enforcement Data

• 154 closing letters since 2010

• 27 cases in the past 20 years

• 2 civil penalty actions
U.S. Origin Claims and the FTC:

Consumer Research

Shiva Koohi, PhD

Economist, Division of Consumer Protection

Bureau of Economics

Federal Trade Commission

The views expressed are mine and do not necessarily reflect those of the FTC
Existing Consumer Research

• What do “Made in USA” claims mean to consumers? 

– Copy Testing and Survey Research

• How important are “Made in USA” claims to 

consumers’ purchasing decisions? 

– Survey Research, Real-World Transaction Data, Economic 

Modeling
Key Findings from Past Research

Assembly in the 

U.S.

Increase in 

portion of costs 

(parts and labor) 

incurred in the 

U.S.

Increased 

Agreement 

with 

“Made in USA”
Two Camps of Consumers

In order to agree with “Made in USA”...*

*for products assembled in the U.S.

A sizable 

minority of 

consumers 

think that all 

or nearly all of 

the costs or 

parts must be 

from the U.S.

The majority of 

consumers would 

agree with “Made in 

USA” if a high degree

of the costs or parts 

are from the U.S. 
Two Camps of Consumers

For example, past research has shown:*

*study asked about a stereo or pen

assembled in the U.S. (FTC, 1997)

22% of 

consumers 

disagree with 

“Made in USA” 

even if 90% of 

the cost was 

incurred in the 

U.S. 

While...

67% of consumers 

agree with “Made in 

USA” if 70% of the cost 

was incurred in the U.S. 

75% would agree if 

90% of the cost was 

incurred in the U.S. 
Do Consumers Care?

• Survey research

– Respondents often state that they prefer to purchase 

U.S.-made products

• Mixed evidence in the real-world

– Country of origin is important, but is often superseded by 

other attributes, such as quality, brand, and price 

– Context-specific
Considerations for Future 

Consumer Research

1. Quantitative Research, Specific-Scenarios

2. Randomized, Controlled Design 

– Address biases such as yea-saying, pre-existing beliefs, and 

selection into pool of respondents

3. Consumer Perception Could Differ Across Products

– E.g., Availability of raw materials

4. Field Experiments Provide Insight into Actual Consumer 

Behavior
References

Agrawal, Jagdish and Wagner Kamakura, Country of Origin: A Competitive 

Advantage?, International Journal of Research in Marketing (1999)

Federal Trade Commission, Made in USA Request for Public Comment on 

Proposed Guides for the Use of U.S. Origin Claims (May 1997)

Harris Interactive, The Harris Poll, Born in the USA or Coming to America (March 

2013)

Koschate-Fischer, Nicole, Adamantios Diamantopoulos, and Katharina Oldenkotte, 

Are Consumers Really Willing to Pay More for a Favorable Country Image? A 

Study of Country-of-Origin Effects on Willingness to Pay, Journal of International 

Marketing (2012)

Piron, Francis, Consumers’ Perceptions of the Country‐of‐origin Effect on 

Purchasing Intentions of (In)conspicuous Products, Journal of Consumer 

Marketing (2000)
Discussion 1:

Consumer Perception – How Do Consumers 

Interpret Made In USA Claims?
BREAK
Discussion 2:

Doing Business Under the Current Policy –

What Are the Compliance or Policy 

Challenges Under the Current Framework?
Discussion 3:

Enforcement Approaches – Should the 

Commission Reexamine Its Current Approach 

to Addressing Deceptive

Made in USA Claims?
CLOSING REMARKS/

INVITATION TO 

COMMENT
THANKS!