The FTC is cracking down on “Made in USA” claims, but risk is not equal across all claims and all products. A series of July letters may reveal a hidden triage framework for who gets a warning and who gets a penalty, write Reed Smith attorneys John Feldman and Julia Solomon Ensor, the former leader of the commission’s Made in USA program.
If your company makes “Made in USA” (MUSA) or similar domestic-origin claims on labels, websites, social media or anywhere else in advertising, your risk profile has been steadily increasing. In March, the White House issued an executive order directing the Federal Trade Commission (FTC) to crack down on misleading origin claims, and enforcement has been accelerating since. But a recent agency signal may reveal something useful for compliance practitioners. In July, the FTC issued seven warning letters that appear to present a framework for assessing where your company falls on the FTC’s MUSA priority spectrum.
The message is clear: this is not a single enforcement sweep. It is a sustained campaign with escalating intensity in direct response to the White House’s orders.
Understanding the emerging framework and building your internal program around it could make the difference between receiving a warning letter or a law enforcement action and never hearing from the agency at all.
What the warning letters reveal about FTC priorities
The knee-jerk response may be that all MUSA claims are too high-risk in this environment. After all, the FTC’s Made in USA labeling rule gives the agency authority to seek civil penalties of up to more than $53,000 per violation per day from companies that make MUSA claims on labels for products that are not “all or virtually all” MUSA. And “all or virtually all” is a difficult — if not impossible — standard to meet in today’s global economy. But if you genuinely perform significant manufacturing functions in the US, eliminating all US-origin claims deprives consumers of important information and deprives your company of a valuable marketing opportunity. Instead, a more nuanced approach is needed, with careful attention to what the July letters reveal about risk and priorities.
The July letters went to a wide range of companies, including those selling e-cigarettes, coordinate measuring machines, industrial laser machinery and musical instruments. And the challenged claims spanned a wide range too, from “Made in USA” and “Built in the USA” to “handmade in Austin, Texas” and hashtags like “#madeinUSA” and “#madeincali.”
But the companies that received the letters had one important thing in common: They received warning letters, not immediate enforcement action. Why? The answer reveals how the FTC triages its targets and how you should triage your own risk.
Bucket 1: Jurisdictional complexity
Three of the seven companies sell vaping and e-cigarette products. The Food and Drug Administration (FDA) has federal jurisdiction over the labeling of electronic nicotine delivery systems through its Center for Tobacco Products, which regulates their manufacture, packaging and labeling. While the FTC has jurisdiction over advertising and marketing of these products, labels are generally the FDA’s domain, and the FTC’s MUSA labeling rule, the agency’s primary tool for getting monetary relief in connection with allegations of deceptive MUSA claims, specifically does not apply where another agency has authority over a product’s labeling. Indeed, the Federal Register notice announcing the final rule specifically acknowledged that “USDA and FDA have primary jurisdiction over labeling issues for the food products within their purview.” Enforcement against an FDA-regulated product’s labeling would invite a jurisdictional defense. And thus, sending a warning letter and being done is significantly less messy than trying for a penalty case.
If your product’s labeling is regulated by an agency other than the FTC, including FDA, US Department of Agriculture, Alcohol and Tobacco Tax and Trade Bureau or others, your enforcement risk from the MUSA labeling rule is lower. That does not mean the FTC cannot challenge your claims in advertising if they are misleading; the FTC retains authority over your advertising under Section 5, and a jurisdictional gray zone is not a compliance strategy, but it does mean the risk of a civil penalty or redress is lower.
Bucket 2: Claims outside the rule’s reach
The other four companies had claims appearing on websites, social media, brochures and trade-show materials rather than on product labels. This distinction is critical. The MUSA labeling rule was authorized by a law which specifically addresses labels on products. The commission’s authorization to apply the rule to non-label claims is tenuous to say the least.
Non-label claims are not free from risk. The FTC can and will challenge deceptive origin claims in advertising under its general authority to pursue unfair or deceptive acts and practices under Section 5 of the FTC Act. But, as with claims subject to other agencies’ jurisdictions, the financial exposure is materially different. A rule violation on a label can mean six-figure civil penalties. A Section 5 advertising case is more likely to result in an injunction and corrective action without the same monetary sting.
Bucket 3: Qualified claims
Notably absent from either the warning letters or recent enforcement actions are allegations that companies have made deceptive “qualified” MUSA claims, like “Made in USA of Imported Components” or “Assembled in USA.” This is an important point related to the categories discussed above. Like claims subject to other regulatory regimes or non-label statements, qualified MUSA claims fall outside the coverage of the MUSA labeling rule. And, as long as they do not reference US-origin parts, the standard marketers need to meet to substantiate them is materially lower. Marketers that substantially transform their products in the USA, without further post-transformation processing overseas, can likely make the claim without risk.
If you are confident your manufacturing process constitutes a substantial transformation in the US under US Customs and Border Protection laws, but you are not quite sure whether non-US content in the product is truly de minimis, a qualified claim is a low-risk option. Consider whether the marketing benefit of the unqualified claim truly outweighs the risk associated with it.
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Understanding the FTC’s enforcement logic is only useful if it informs your internal processes. Here is what a defensible MUSA compliance program should include:
A comprehensive claim inventory
Identify every US-origin claim your company makes, across all channels:
- Product labels and packaging.
- Website copy, including product pages and “About Us” sections.
- Social media posts, captions, bios and hashtags (yes, “#madeinUSA” counts).
- Brochures, trade-show materials and sales collateral.
- Third-party marketplace listings (Amazon, etc.).
- Advertising.
Do not limit your inventory to the specific language, “Made in USA.” The FTC’s July letters flagged a range of claims, including “Precision Built in the USA,” “created by American workers, engineers, and innovators,” city- and state-origin claims like “handmade in Austin, Texas” and “Made in [state]” claims. The agency has made clear it will analyze these under the same “all or virtually all” standard it applies to traditional “Made in USA” claims.
Build and maintain substantiation files
For every origin claim you identify, you need a substantiation file documenting:
- Where final assembly or processing occurs.
- Where all significant processing occurs.
- The sourcing origin of all ingredients or components with particular attention to whether foreign content is more than de minimis.
This is not a one-time exercise. Supply chains shift. Substantiation must be current. If your file is more than 12 months old, or if you have had any supplier changes, it is time to re-substantiate or remove the claim.
Map your regulatory landscape
Determine which agencies have jurisdiction over your product’s labeling. Understand which rules each agency enforces regarding origin claims and where overlapping jurisdiction may create either additional exposure or potential defenses.
Differentiate risk by claim placement
Based on the FTC’s revealed enforcement priorities, assess your risk profile:
| Claim placement | Primary authority | Penalty exposure | Priority level |
|---|---|---|---|
| Unqualified claims on product labels (FTC-jurisdictional products) | MUSA labeling rule | Civil penalties (~$53K/violation) | Highest |
| Unqualified claims on product labels (other-agency products) | Varies; jurisdictional questions | Depends on agency; overall likely lower than FTC | Moderate |
| Unqualified claims on website, social media, advertising | Section 5 | Injunction; limited monetary | Moderate |
| Qualified claims | Section 5 | Injunction; limited monetary | Lower |
This does not mean it is OK to ignore non-label claims. The FTC’s warning letters demonstrate it is watching all channels. But it does provide important information on where to allocate compliance resources first.
Establish a review cadence
MUSA compliance is not a point-in-time exercise. Build recurring processes:
- Quarterly: Review social media accounts and advertising copy for new or changed origin claims.
- Annually: Full claim inventory refresh and substantiation file review.
- Trigger-based: Any supplier change, product reformulation or new product launch should trigger immediate review.
- Marketing review gate: No origin claim goes live without compliance sign-off, including social media posts and hashtags.
Looking ahead
“Made in USA” claims remain in the FTC’s crosshairs as it follows through on a central component of the Trump Administration’s domestic manufacturing agenda. Expect more action on the horizon.
In the meantime, the compliance practitioner’s job is straightforward, even if the execution is not: know who regulates you, know what claims you are making, confirm the claims are true and substantiated and build the internal processes to keep it that way. The companies that do this work now are the ones that will never see a warning letter (or worse) in their inbox.
Julia Solomon Ensor
John P. Feldman 
