New federal rule could eliminate fraudulent product claims
Washington. The Coalition for a Prosperous America (CPA) today praised the Federal Trade Commission (FTC) for strengthening its rules governing “Made in USA” product claims. CPA, which had actively pushed the FTC to update its policy on products sold in the United States, believes the new rule could help to eliminate misleading labels on consumer goods.
“We’re pleased to see the FTC take this much-needed action,” said Greg Owens, CEO of Sherrill Manufacturing/Liberty Tabletop and a Co-Chair of CPA’s Buy American committee. “There is a vast array of products that claim to be ‘American-made.’ They’re often accompanied by an American flag and a less prominent qualification about ‘globally sourced materials.’ These kinds of descriptions often mislead consumers or give a false impression that a product is indeed manufactured in the United States.”
For decades, the FTC relied on Section 5 of the Federal Trade Commission Act to enforce Made in USA claims. But the agency has been hamstrung by a provision barring penalties against first-time offenders, something the new rule will address. However, CPA finds it unfortunate that two of the five FTC Commissioners, Phillips and Wilson, wrote that this regulation should apply only to physical labels and not online product advertising.
Michael Stumo, CEO of the CPA, commented on the limits proposed by Phillips and Wilson, “When it comes time for individuals to be appointed to the Federal Trade Commission, we must be alert and engaged to ensure we get commissioners who will put the interests of America’s consumers and industry first.”
The new FTC rule specifies that it is a deceptive act to label any product as ‘Made in USA’ unless “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.” Products not in compliance shall be treated as a violation of FTC rules regarding “unfair or deceptive acts or practices.”
“America’s consumers deserve the most accurate product labeling possible,” said James Stuber, President of Alltham P.B.C and a Co-Chair of CPA’s Buy American committee. “Too many imports, particularly from China, are produced with shoddy workmanship and unsafe materials. Despite this, companies continue to market inferior goods while cynically using claims of ‘Made in USA’ to mislead consumers. We’re hopeful that the FTC’s action will help to eliminate these unsafe imports.”
In addition to promoting American-Made products, CPA advocates a ‘Made in America 2030’ plan to rebuild economic and national security. Read more.