With shifting tariffs and growing criticism of fast fashion, more brands are emphasizing when their products are made in the United States. American-made goods have long been celebrated for their quality and appeal, resonating with consumers worldwide. Unfortunately, not all claims about American manufacturing were accurate or truthful. Misleading statements have not only misinformed buyers but have also led to significant fines imposed by the FTC.
Products Must Be All or Virtually All Made in the USA
To ensure brands avoid making false "Made in the USA" claims, the FTC introduced the Made in the USA Labeling Rule (16 C.F.R. Part 323), which took effect in August 2021. This regulation prohibits businesses from labeling their products as "Made in the USA" unless they are "all or virtually all" manufactured within the United States. That includes the product’s final assembly, processing, and significant components. The rule applies to product packaging labels, as well as to online platforms, mail-order catalogs, and promotional materials.
Cooking Up a Recipe for Disaster
In 2020, the Federal Trade Commission (FTC) took action against Williams-Sonoma for falsely advertising that several products from Pottery Barn Teen, Rejuvenation, and Pottery Barn Kids were made in the United States, even though they were manufactured abroad. The FTC’s order prohibited Williams-Sonoma from making further deceptive claims about its products’ origins.
However, Williams-Sonoma violated this order by advertising Pottery Barn Teen mattress pads as “Crafted in America from domestic and imported materials,” despite the products being made in China. Further investigation uncovered six additional products with misleading “Made in USA” labels after the order was issued.
In April 2024, the FTC imposed a $3.17 million fine on Williams-Sonoma—the largest penalty ever under the “Made in USA” rule. As part of the settlement, the company must also implement a robust compliance program to prevent future violations. This includes submitting annual compliance reports, clearly disclosing the extent of foreign components and processing, and ensuring that the product’s final substantial transformation takes place in the United States.
What This Means for You
If you’re in e-commerce, consumer goods, or lifestyle branding, and market your products made in the USA, your products and labels must comply with the Made in the USA Labeling Rule.
Key considerations:
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Supply chain audits: Can you prove your products meet the “virtually all” U.S.-made requirement?
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Marketing review: Are your promotional materials aligned with what your product labeling claims?
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Label transparency: Are you clearly communicating the country of origin?
How We Can Help
While the FTC issued guidelines for U.S. Origins Claims, this space can be tricky to navigate. As legal and marketing compliance advisors, we help brands navigate complex rules around advertising and labeling requirements, ensuring you’re both persuasive and protected. Whether you’re a startup on Shopify or a legacy brand, now is the time to get compliant.
Need help with a compliance review for your products? Schedule a free Discovery Call today to get started.
