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Public Citizen Praises Commissioner Chopra, FTC for Crack Down on ‘Made in the USA’ Label Fraud and Abuse

CONTACT: Matt Groch mgroch@citizen.org (202) 454-5111

WASHINGTON, D.C. – The Federal Trade Commission (FTC) published a new rule today to penalize marketers for false, unqualified claims that their products are manufactured in the U.S.. The FTC was given statutory authority to tackle false and misleading “Made in USA” labels in the implementing legislation of the North American Free Trade Agreement (NAFTA) in 1993. Due to an initiative by FTC Commissioner Rohit Chopra, a new rule requires firms making unqualified “Made in USA” claims to prove that their products are “all or virtually all” made in the U.S. or face civil penalties of up to $43,280 per violation. In January 2021, Public Citizen filed public comments in support of the rule. Lori Wallach, director of Public Citizen’s Global Trade Watch division released the following statement:

“Public Citizen applauds the FTC and Commissioner Rohit Chopra’s leadership for initiating this rulemaking and Chair Lina Khan for working to adopt and finalize a long overdue policy that ensure the “Made in USA” label now means what consumers have long assumed it did. Only when all the assembly and processing that goes into a product and its components are made in the U.S. and all components are made and sourced in the U.S. can companies label or otherwise identify it as “Made in USA” product.

“This initiative represents an important break from the FTC’s past practices of weak or non-existent enforcement, which fostered decades of deceptive product origin labels and claims. The worst actors have known that until recently they would face no peril or liability if they created a major scam to rip off consumers and make a fast buck. Meaningful application of the rule’s financial penalties available to punish first-time violations, the possibility of injunctive relief and refunds, and other relief for consumers are essential to ensure enforcement of critical consumer protections and to treat fairly the businesses that act honestly and follow the law.”

“Subjecting consumers to systematic deceptions about where products are made, which happens all too regularly online and with physical labels on goods, creates a vicious circle: U.S. producers and those who sell their products are penalized by the lack of enforcement against cheating businesses’ fraud that tricks consumers into acting against their values. Consumers who get scammed become less trusting of labels and online representations, and this diminishes the value to legitimate made in the U.S. producers and sellers that provide the goods that data show Americans prefer. This rule is great news for consumers and for U.S. businesses that produce here and now have a label that can empower consumers to accurately prioritize the purchase of their goods.”