“Made in USA” Claims Need Better Data, Not More Liability
If a product advertises itself as being made in America, a reasonable consumer will assume that the product was, in fact, made in America. President Trump’s recent executive order (EO), “Ensuring Truthful Advertising of Products Claiming to be Made in America,” diagnoses a real problem: False “Made in USA” (MUSA) claims. However, the EO adopts a flawed policy approach that reflects misaligned priorities and shifts the blame from deceptive sellers and manufacturers to e-commerce platforms. A more targeted and effective approach should prioritize strengthening data and verification systems to check MUSA claims.
The EO directs the Federal Trade Commission (FTC) to prioritize legal actions against deceptive MUSA claims and to propose new regulations requiring online marketplaces to verify these claims. The FTC should take action against sellers and manufacturers making false MUSA claims. Yet, holding online marketplaces liable for MUSA misrepresentations would not solve the underlying issue and would likely increase costs and reduce product availability for consumers.
The legal framework to address false MUSA claims is already well established. Section 5 of the FTC Act authorizes the FTC to take action against “unfair or deceptive acts or practices in or affecting commerce.” In 1997, the FTC issued a policy statement specifying that any MUSA claim must meet an “all or virtually all” standard—in other words, all or nearly all significant components, labor, and processing of a product must originate in the United States. In 2021, the FTC codified this standard into the Made in USA Labeling Rule, allowing the FTC to seek civil penalties against violators. In recent years, this enforcement lever has brought multi-million dollar penalties against companies, including Williams-Sonoma and Kubota North America, for falsely labeling some of their own products as Made in USA.
Beyond enforcement, market solutions also exist to help consumers navigate MUSA claims. Some retailers have built their brand around MUSA, such as Goodwear, which self-reports that 100 percent of its clothing is MUSA and uses 100 percent American-grown cotton. Goodwear states that an independent third-party audit has verified these claims. Online marketplaces built around MUSA also exist, such as MadeInUSA.com, which labels its listings as either MUSA, MUSA with US & Global Materials, or Assembled In USA.
Organizations like AllAmerican.org offer consumers independent brand investigations and state-by-state directories to verify and fact-check MUSA claims. AllAmerican.org and other similar organizations have already built a nascent data infrastructure that fits the EO’s foremost goal: “clear, accurate, substantiated, and accessible information” on MUSA claims.
Like other consumer protection issues, such as product safety or counterfeiting, country-of-origin labeling will never be perfectly enforced, and some incidental mislabeling is inevitable. Any solution should therefore prioritize large-scale bad actors, such as sellers running coordinated MUSA fraud, and rely on scalable, low-cost technological solutions for smaller cases.
The most promising technological solution is agentic commerce: artificial intelligence (AI)-powered shopping that can autonomously execute purchases based on user-defined preferences. Already well on its way towards broader adoption, the technology could allow consumers to specify that they only want to purchase MUSA products, with the agent cross-referencing brand disclosures, third-party audits, and independent investigations before completing a purchase. For this to work at scale, data sources will need to be standardized and machine-readable.
That is why the Trump administration should direct the Made in America Office to procure or fund a public-facing MUSA verification database. This would support a market for accredited third-party auditors, such as the one Goodwear already uses, strengthen services like AllAmerican.org, supply AI agents with a reliable data source to verify claims in real time, and give the FTC a clearer, data-driven basis for prioritizing enforcement.
The EO does not just task the FTC to better prioritize MUSA enforcement, but also proposes holding online marketplaces liable for manufacturers’ country-of-origin claims. This echoes the faults of the Country of Origin Labeling Online Act, legislation reintroduced in the current Congress after failing to advance in the previous session. If passed, the act would create an uneven playing field between brick-and-mortar stores, online retailers, and online marketplaces, since regulators do not typically hold physical retail stores liable for manufacturers’ labeling errors. The Act also has no solution for how to verify if the country-of-origin information is incorrect. This would likely force online marketplaces to incorporate the cost of compliance and potential liability into pricing, limit listings to products with verifiable origin claims, or both.
The administration has identified a genuine problem: Fraudulent MUSA claims deceive American consumers and undercut domestic manufacturers who invest in American production. However, the solution is not to conscript online marketplaces as country-of-origin auditors for every product they list. Instead, the government should build the public data infrastructure to make MUSA verification more scalable, machine-readable, and useful for consumers, AI agents, and the FTC itself.
Image credit for social media preview: Gage Skidmore/Flickr
