In our recent post, "FTC Declares July 'Made in USA' Month: Are Your Claims Compliant?", we warned that the FTC wasn't just waving flags—it was getting ready to wave civil investigative demands (CIDs). Now, true to form, the Commission has issued warning letters to several companies—ranging from product manufacturers to online marketplaces—regarding allegedly deceptive "Made in USA" claims.
For those treating origin claims like marketing fluff rather than advertising claims, this is your cue to get serious.
What Prompted the Warnings?
According to the FTC, a number of companies made unqualified "Made in USA" claims without meeting the standard set forth by Section 5 of the FTC Act and the Made in USA Labeling Rule—which requires that a product be "all or virtually all" made in the United States, including final assembly, processing, and components.
The letters demand that the product manufacturers either discontinue the claims or submit substantiation. Regarding the letters to online platforms, the FTC noted that the letters do not reflect any assessment as to whether platforms could be held responsible for claims made by third-party sellers. However, the Commission did suggest that it expects platforms to "monitor, identify, and take corrective action" against sellers who are running afoul of the Made in USA standard.
Noteworthy: No NPO, But Still Penalty Exposure
One significant deviation from recent FTC enforcement practice: these warning letters do not invoke the Commission's Notice of Penalty Offense (NPO) authority, which has previously been a favored tool—especially in actions like the 2022 bamboo fabric warnings—to lay the foundation for civil penalties by attempting to establish prior knowledge of wrongdoing. Section 230 of the Communications Decency Act should arguably shield these platforms from liability for claims made by third parties, but the FTC could nevertheless issue CIDs inquiring about false claims on the platform.
But remember: the FTC doesn't need an NPO to seek penalties under the Made in USA Labeling Rule. That rule, finalized in 2021, expressly authorizes civil penalties for violations, regardless of whether the recipient received prior notice. So even without the extra NPO muscle, companies that ignore the warnings could face monetary consequences.
And those consequences can be pricey: as of January 2025, the FTC's civil penalty maximum was inflation-adjusted to $53,088 per violation or per day for ongoing violations.
What Advertisers Should Do Right Now
If your brand leans heavily on patriotism, this is the moment to make sure your claims won't backfire.
Substantiate everything: If you're using an unqualified "Made in USA" claim, ensure you can prove the product is "all or virtually all" domestically made.
Use qualified claims when appropriate: "Assembled in the USA with imported parts" might not sound as bold—but it's a lot less risky.
Don't forget implied claims: American flags, bald eagles, and good ole' red-white-and-blue aesthetics can imply origin and trigger enforcement.
The Bottom Line
The FTC isn't just declaring July "Made in USA Month"—it's enforcing it. And while this latest round of letters didn't invoke the Notice of Penalty Offense authority, that doesn't mean the recipients are in the clear. Violations of the Made in USA Labeling Rule already carry civil penalties, full stop.
So if you're going to sell American pride, make sure your supply chain, assembly process, and component sourcing are as patriotic as your marketing team thinks they are.
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