Using and Misusing the “Made in USA” Label

Confused about whether you can use “Made In USA” on your labels? And confused about how to do it? You aren’t alone and even the biggest brands can get it wrong! This is a follow up to our previous post on What are FTC Label Requirements?

Last summer, as reported by CBS News, Truth in Advertising (“TINA.org”), a watchdog nonprofit whose mission is to protect consumers against deceptive advertising, filed a complaint against Walmart stating over 100 products on its website had “Made in USA” labeling errors. The Federal Trade Commission (FTC) initiated an investigation. Ultimately, Walmart removed many of the “Made in USA” logos from its product listings, deleted erroneous U.S. country of origin claims that appeared in product descriptions or titles, and made more detailed disclosures about the percentage of American-made. content contained in the products. Satisfied with Walmart’s reaction, the FTC closed its inquiry three months later.

Just thinking about Walmart’s operational nightmare and corrective costs (not to mention the public relations fiasco) makes us cringe! More importantly, it should impress on you why it’s critical to correctly identify and disclose the country of origin on your fashion products. Because even if your fashion brand or business is not as big as Walmart (yet!), the FTC’s labeling requirements still apply to your business with equal force. Any consumer (think unhappy customer) can make a complaint to the FTC that your brand is engaging in deceptive advertising practices simply because your labels are wrong. And an FTC inquiry means time and money spent on a preventable mistake.

clothing_labels

We’ve come up with 4 questions to help you identify and label your country of origin correctly. As with our post on FTC labeling requirements, these questions are meant as a basic primer for textile products only. There are many additional specific rules regarding the country of origin and fiber content, plus details rules for cotton, fur, wool, cashmere, and footwear. It is a good idea to review the FTC regulations and rules carefully (and multiple times) and perhaps consult with a fashion law attorney to make sure that your labels are in full compliance.

How Do I Label “Country of Origin”?

Before launching into the questions a quick recap: understand that according to the FTC, you must disclose the country of origin on the front of your label in English, and you should state the specific country, rather than just “European Union” or “Asia”. It is okay to use standard abbreviations such as U.S.A. or spellings close to the English version that clearly identify the country.

Additionally, if your product is a garment with a neck, include a label that discloses the country of origin on the front side, and affix it to the inside center of the neck. Attach the label either midway between the shoulder seams or close to another label attached to the inside center of the neck. The country of origin label shouldn’t be covered or obscured by any other label.

So how can you figure out your country of origin? Let’s dive into the questions!

Case 1. Is 100% of your product manufactured and processed OUTSIDE of the United States?

If the textile product is made entirely outside of the United States, then the label must state the specific name of the country where the manufacturing or processing occurs. You should check Customs and Border Protection regulations to determine the correct country of origin because the answer depends on the type of product and the country (or countries) where key steps in the production process take place.

You typically don’t have to consider the origin of parts of the product that are exempt from content disclosure, like zippers or buttons. But keep in mind that Customs and Border Protection, a federal body governing import of goods to the U.S., and certain states (always consider California), may have additional country of origin labeling requirements separate from those in the national Textile and Wool Acts. Do your homework and figure out the rules that apply to your situation, to ensure you are in compliance with all applicable federal and state laws and regulations.

Related Reading:  3 Reasons Your Jewelry Should be Made in the USA

Case 2. Is 100% of your product manufactured and processed INSIDE the United States?

100% means all or virtually all of the significant parts and processing of the product originate in the Unites States. If your products contain no foreign content (or a tiny, negligible amount), then you can state Made in USA.” or “American Made” on your labels.

made_in_usa_label

Case 3. Is your product manufactured (think assembled) or processed in the United States with imported parts or goods?

If imported fabric, dyed goods, yarn or other such materials are used to sew, produce or assemble your product in the United States, then you can identify the country of origin as “Made in USA of imported fabric,” “Made in USA of imported dyed goods” or “Made in USA of imported yarn.” The statement should appear in one, continuous sentence, meaning “Made in USA” and the “imported” are next to each other with no other words in between them.

Generally, you are not required to identify the specific country of origin of the imported goods or parts, unless another agency besides the FTC requires you too. For example, Customs requires that “flat” goods – handkerchiefs, scarves, towels, sheets, napkins – state both the United States and the specific country or origin of the fabric.

Case 4. Are you manufacturing or processing INSIDE and OUTSIDE of the United States?

If manufacturing or processing steps occur in the United States and another country, then you most identify both countries on the label. Phrases or words describing the specific processing in each country are usually necessary to convey the correct information to the consumer. Here are examples from the FTC’s website:

  • » Made in Sri Lanka, finished in USA
  • » Comforter filled, sewn, and finished in USA, with shell made in Malaysia
  • » Assembled in USA of imported components

made_in_usa

When “100% “Made in USA” Isn’t Feasible

Now, let’s talk practicalities. “Made in USA” has enormous cache with consumers. And while the “Made in USA” movement is compelling more manufacturing in the United States, you still may have to source (despite your best efforts) product parts from a foreign source. We know many fashion designers in this situation and who are conflicted because they want to identify as an American-made brand, but to do so runs afoul of the FTC’s rules.

Here’s our advice: Be patient and flexible. Be proud that you are making effort to produce or assemble in the United States. You are doing your part by contributing to the local economies and creating work for people here. Your efforts are part of a larger movement that will continue to inspire more manufacturing in the United States. Eventually, the resources will be available for you to manufacture 100% here.

Lastly, be truthful (despite what other brands might be doing). Follow the rules outlined in Cases 3 or 4 above and disclose as accurately as possible the country of origin with all the caveats.

made_in_usa

You can always change your label to proudly state “Made in USA” once you are fully manufacturing here in America. Your truthfulness will instill even more brand loyalty in your customers. But if you wrongfully assert “Made in USA” to consumers and are caught, the loss of credibility, clients, money, and time may be far harder to recover in the long run. After the enormous investment you’ve made to bring your vision to the marketplace, we don’t think this is a risk worth taking!

THE FASHION LAW STUDIO PROVIDES LEGAL EDUCATION SUBJECT MATTER ONLY. THIS ARTICLE AND ITS CONTENTS ARE FOR INFORMATIONAL PURPOSES ONLY AND DO NOT CONSTITUTE LEGAL ADVICE. THE FASHION LAW STUDIO IS NOT A LAW FIRM OR A SUBSTITUTE FOR AN ATTORNEY OR LAW FIRM.  NO ATTORNEY-CLIENT RELATIONSHIP IS CREATED HEREIN. THIS COMMUNICATION IS NOT “ATTORNEY ADVERTISING” OR A “SOLICITATION” UNDER THE NEW YORK AND CALIFORNIA RULES OF PROFESSIONAL RESPONSIBILITY GOVERNING ATTORNEY CONDUCT.

 

Related Reading:  3 Strategies to Create a Successful Online Store

Make Your Labels

A search for “custom label” on Maker’s Row yields 675 results – you’ll be able to proudly list “Made in USA”! Still working on other parts of your product? We have nearly 10,000 manufacturers in apparel, accessories, furniture, packaging, and more!

custom_label

You May Also Enjoy

For more on design, production, and general business advice (including the legal side of starting a business), join our daily blog mailing list!