What qualifies as Made in USA?
In response to the increasing complexity of globalization and the threat of production moving overseas, the United States adopted new rules for what does and does not qualify as being “Made in America” in the 1990s. In theory, the rules regarding what qualifies as “Made in America,” are simple.
“A product has to have all or virtually all of its manufacturing components made in the United States or one of its territories.” This is according to the Federal Trade Commission.
However, the reality of the situation is much more complicated and companies can base production centers in the U.S. while obtaining their manufacturing and raw materials from places like China. It’s all about how significant the materials are in the construction process. To use another example, a computer company can claim their product is made in America even if the steel used to make the casing for parts comes from different countries, because that steel isn’t a very big part of what goes into a computer. But if a company that builds hammers gets the steel for the hammer from another country and just assembles the item in America, that product cannot be labeled “Made in USA.”
Why should you make your product in the USA?
Many Americans are worried about the decline of industry in their country, and are also patriotic. They want to spend money on products that support American jobs or that are built in the country. Building your product in America and obtaining the “Made in America” label will help ensure that this group of customers will be loyal to your brand. Further, the labor force in America is highly educated and labor costs are not as high as in a number of other developed countries. Further, higher fuel costs have made it much more expensive to ship goods to America from factories overseas.
Consequences for not following regulations
If your company does not produce all or almost its entire product in the U.S but still puts a “Made in America” mark on the product, you may be sued by customers, fined by the government, or have the product banned. However, if a company’s product does not qualify as completely “Made in America,” there are still other labels that they can put on their product, such as “Assembled in the U.S.A” or “Made in the USA from imported parts.” Your company cannot display the American flag or the statue of liberty as a way around the restrictions, as that is also illegal. If a product is simply imported to the USA without any production or assembly taking place in the country, your company must place a label somewhere on the item saying where it was produced.