FTC Issues Warning Letters to Businesses and Platforms After Designating July “Made in the USA” Month
Several surveys (including those cited in the U.S. Federal Trade Commission’s (FTC or Commission) 2020 staff report on “Made in the USA” claims (MUSA claims)) show that a majority of consumers prefer American-made products. While this can be good news for companies whose products are made stateside, not all merchandise advertised as American-made conforms with the exacting “all or virtually all” standard established by the FTC. On July 1, 2025, FTC Chairman Andrew Ferguson designated July as “‘Made in the USA’ Month,” and reiterated the Commission’s commitment to cracking down on deceptive MUSA claims. According to Chairman Ferguson, “It is important to protect Americans from deceptive advertising, and also important because it provides consumers with confidence that when they buy something that says, ‘Made in the USA’ they are actually supporting American workers, American manufacturers, and American communities.”
The FTC quickly followed this announcement on July 8 by sending warning letters to four companies, reminding them to comply with FTC’s 2021 Made in USA Labeling Rule (MUSA Labeling Rule). Significantly, the FTC also sent letters to Amazon and Walmart regarding allegedly deceptive MUSA claims made by third-party sellers on the two companies’ e-commerce websites. In its letters to Amazon and Walmart, the FTC makes clear that it expects online marketplaces to “monitor, identify, and take corrective action against third-party sellers who make false or misleading ‘Made in USA’ claims on [an] online marketplace in violation of the FTC Act, MUSA Labeling Rule,” and the respective marketplace’s code of conduct. Product descriptions, photos, and information are typically furnished by the third-party seller and simply published as provided by the online marketplace without altering the content. The FTC notices could signal a potential expansion of the compliance requirements imposed on online marketplaces for MUSA claims made by third-party sellers, with implications for all types of advertising claims appearing in listings developed by third-party sellers online and possibly at brick-and-mortar retailers.
As we wrote here, those promoting or offering for sale U.S.-made goods must comply with the MUSA Labeling Rule, which prohibits companies from labeling products as “Made in USA” unless they can establish all of the following:
- Final assembly or processing of the product occurs in the U.S.;
- All significant processing that goes into the product occurs in the U.S.; and
- All or virtually all ingredients or components of the product are made and sourced in the U.S.
Where products and/or their components do not meet all three requirements, a MUSA claim must be appropriately qualified so as not to overstate the amount or type of U.S. content or processing. Violations of the MUSA Labeling Rule are treated by the FTC as unfair or deceptive acts or practices under Section 5(a) of the FTC Act and are subject to civil penalties, which can be steep. Indeed, the largest ever MUSA penalty, $3.17 million, was imposed last year against Williams-Sonoma for allegedly violating a 2020 FTC order that required the company to pay $1 million to the FTC.
Chairman Ferguson’s designation of “‘Made in the USA’ Month” and the FTC’s warning letters come on the heels of a reported increase in class action litigation targeting MUSA claims. According to the Wall Street Journal (WSJ), there were thirteen such class action suits filed in the first half of 2025, compared to seven in all of 2024. The WSJ also reports that only five out of 80 MUSA class actions tracked by one consumer watchdog since 2011 resulted in dismissals, with no jury findings in favor of defendants.
In addition to regulators and private plaintiffs, companies are also taking aim at what they believe are deceptive MUSA claims made by competitors. The National Advertising Division (NAD) of the Better Business Bureau (BBB) National Programs is the self-regulatory body of the advertising industry and handles advertising disputes involving national advertising, including MUSA challenges [1]. If domestic origin and processing increase in the current environment of new and increasing tariffs, and manufacturers seek to recoup some of the increased production costs from consumers, MUSA claims may be on the rise, and with that, more challenges could be filed with NAD.
Against this backdrop of rising scrutiny of MUSA claims, it is important for advertisers to carefully review how they promote U.S. content or processing on product labels and in marketing materials. Truthful, non-misleading, and adequately substantiated MUSA claims are legally permitted and useful to consumers, but claims may need to be carefully qualified to avoid deception. When suppliers and manufacturing practices change, claims should be reevaluated and, if needed, modified to avoid misleading consumers.
[1] Most complaints to NAD involve competitor challenges, but NAD may also bring a challenge on its own. Consumers can also file a challenge with NAD, but such challenges are very rare.