The definition of "Made In The USA"

[R Baer]

First off, this is not intended to become a political thread debating global manufacturing. This thread is simply an attempt to pass on some of the information I have come across lately while researching this subject.

Now, that said, I have noticed that there seems to be quite a bit of confusion over what "Made In The USA" actually means. Well, there's good reason for the confusion as the regulation is basically 40 pages of guidelines and not a lot of concrete rules. Also, some of the confusions stems from a FTC proposal back in 1996 that was to require a product to have 75% American made content for a product to be called "Made In USA". This proposal was never actually put into effect, yet a lot of people still cite its content as fact. The current policy states that a product's final assembly must take place in the USA and "all or virtually all" of the components must be made in the USA to be labeled "Made In The USA". Also, while most people focus just on the number of foreign components contained in a product, the rules also take into account the cost of the foreign components in relation to the cost of the overall product.

In an effort to help clarify the current regulation, I've pulled some key points from the current regulation. Anyone wanting to learn more can check the Federal Trade Commission site:
Complying with the Made in USA Standard | BCP Business Center


What is the standard for a product to be called Made in USA without qualification?

For a product to be called Made in USA, or claimed to be of domestic origin without qualifications or limits on the claim, the product must be "all or virtually all" made in the U.S. The term "United States," as referred to in the Enforcement Policy Statement, includes the 50 states, the District of Columbia, and the U.S. territories and possessions.

What does "all or virtually all" mean?

"All or virtually all" means that all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no — or negligible — foreign content.

What factors does the Commission consider to determine whether a product is "all or virtually all" made in the U.S.?

The product’s final assembly or processing must take place in the U.S. The Commission then considers other factors, including how much of the product’s total manufacturing costs can be assigned to U.S. parts and processing, and how far removed any foreign content is from the finished product. In some instances, only a small portion of the total manufacturing costs are attributable to foreign processing, but that processing represents a significant amount of the product’s overall processing. The same could be true for some foreign parts. In these cases, the foreign content (processing or parts) is more than negligible, and, as a result, unqualified claims are inappropriate.

Example: A company produces propane barbecue grills at a plant in Nevada. The product’s major components include the gas valve, burner and aluminum housing, each of which is made in the U.S. The grill’s knobs and tubing are imported from Mexico. An unqualified Made in USA claim is not likely to be deceptive because the knobs and tubing make up a negligible portion of the product’s total manufacturing costs and are insignificant parts of the final product.

Example: A table lamp is assembled in the U.S. from American-made brass, an American-made Tiffany-style lampshade, and an imported base. The base accounts for a small percent of the total cost of making the lamp. An unqualified Made in USA claim is deceptive for two reasons: The base is not far enough removed in the manufacturing process from the finished product to be of little consequence and it is a significant part of the final product.

Representations about entire product lines

Manufacturers and marketers should not indicate, either expressly or implicitly, that a whole product line is of U.S. origin ("Our products are made in USA") when only some products in the product line are made in the U.S. according to the "all or virtually all" standard.

Assembled in USA

A product that includes foreign components may be called "Assembled in USA" without qualification when its principal assembly takes place in the U.S. and the assembly is substantial. For the "assembly" claim to be valid, the product’s "last substantial transformation" also should have occurred in the U.S.

[JimmyM]

well that's just vague enough for government work.

[Jim C]

Interesting read.
Do you (as a manufacturer) take this to mean that:
If say an amp was to be assembled in the USA, in order to qualify for Made is the USA, there would have to be a significant percentage of US made parts?

My question is how to determine the required US parts count for qualification.
For example do 25 foreign made pots, resistors and capacitors negate the US made chaisis (1ea.), transformer (2ea.), and PC boards (3ea) which would be higher value items?

Very messy indeed.

[seamonkey]

FTC probably doesn't watch the bass amp market. It is probably up to consumers or competitors to report suspicious labeling.

[brendanbassist]

That means 98% of all bass amplifiers that say "made in USA" are actually "Assembled in USA".

[AverageWhiteBassist]

Originally Posted by brendanbassist

That means 98% of all bass amplifiers that say "made in USA" are actually "Assembled in USA".

Only 98%, I would have thought it was higher.....

[Hawaii Islander]

How many American manufacturers of electronics components are there these days (EG&G, Raytheon, GE)? It used to be a requirement that ALL electronics components used in US Military equipment be produced in the United States in order to protect those sources of components in the event of war. It seems to me that there should still be sources of US made electronics components cost of components aside.

[Jerrold Tiers]

Note the "removed from" issue in the 'cover-all" verbage...... the farther the part is from the final product, and the lower its cost, the less it counts towards squashing the "made in USA" label.

So a list of resistors, capacitors, transistors etc etc which are used at an early stage of manufacturing "probably" would not zap "made in USA".

The parts might be used "in the USA" to make a printed circuit assembly, which is then assembled , also in the USA, into a made-in-USA metal chassis, which is then installed (again in the USA) into a made-in USA wood cabinet, with a made-in-USA speaker........... The use of "made in USA" would then probably not be considered deceptive because of A) the relatively small cost of the parts, and B) their "distance" from the end product.

In that case, all the final assembly, and all of the sub-assemblies are "made" in the USA, as are the high cost component parts (metal chassis, cabinet, speaker, etc.).

A chassis, which is both an expensive part, and not so far from the finished product, might cause the product labeling to be found "deceptive". Much more so with a complete PWB assembly AND chassis parts, or worse yet, a completed chassis assembly.

[arsie]

Certain garment companies have relocating their factories (and their staff) to places like Guam and Puerto Rico to be qualified as Made in USA.

[nocontrols]

Originally Posted by brendanbassist

That means 98% of all bass amplifiers that say "made in USA" are actually "Assembled in USA".

Maybe I'm crazy for saying this but I don't really mind that definition because it's the assembling of the thing that defines it. Although, on the other hand, the individual components matter a lot, too. Gah, this is sticky.

[R Baer]

Originally Posted by Jim C

Interesting read.
Do you (as a manufacturer) take this to mean that:
If say an amp was to be assembled in the USA, in order to qualify for Made is the USA, there would have to be a significant percentage of US made parts?

My question is how to determine the required US parts count for qualification.
For example do 25 foreign made pots, resistors and capacitors negate the US made chaisis (1ea.), transformer (2ea.), and PC boards (3ea) which would be higher value items?

Very messy indeed.

I think Jerrold has a pretty good grasp in regards to the farther the part is from the final product, and the lower its cost, the less it counts towards squashing the "made in USA" label concept. Then again, this also seems to contradict a bit with the part that states that "the product should contain no — or negligible — foreign content".

Like I said, it does seem to be a bit of grey area. What I take it to mean is that If I am adding low cost, foreign components, like the capacitors and resistors to a board I make here in the States, those parts would not constitute enough value and are far enough removed from the final product, to keep me from using Made In USA, even though there are a considerable number of them. Now, the fact that we do use some foreign parts of significant value, such as the pots, tubes and output transformers, leads me to believe that our amplification products should probably be labeled Assembled In The USA.

[JimmyM]

let's all just love each other, huh?

[Hawaii Islander]

Originally Posted by JimmyM

let's all just love each other, huh?

OK

[ButtUglyJeff]

So, does this eliminate all tube amps from the title "Made in USA"?

[Jerrold Tiers]

Originally Posted by ButtUglyJeff

So, does this eliminate all tube amps from the title "Made in USA"?

I think it might..... it's an important part of the product, fairly high cost, and is at a late stage of the manufacturing process, parts used with NO alterations (duh!) in the final product...... looks like it.

[Mark Reccord]

Originally Posted by Jerrold Tiers

I think it might..... it's an important part of the product, fairly high cost, and is at a late stage of the manufacturing process, parts used with NO alterations (duh!) in the final product...... looks like it.

You could *probably* argue that tubes are consumables and therefore aren't actually part of the amp.

[Jerrold Tiers]

Originally Posted by Mark Reccord

You could *probably* argue that tubes are consumables and therefore aren't actually part of the amp.

Maybe............... but they are essential, AND are added as part of the manufacturing process, unlike the lamp which was the example in the linked definitions.....

The definition is pretty vague, and it might depend on whether the gov'mnt functionary likes you that day.

[Mark Reccord]

Originally Posted by Hawaii Islander

How many American manufacturers of electronics components are there these days (EG&G, Raytheon, GE)? It used to be a requirement that ALL electronics components used in US Military equipment be produced in the United States in order to protect those sources of components in the event of war. It seems to me that there should still be sources of US made electronics components cost of components aside.

There are a few boutique manufacturers of capacitors and other basic components left in the US, but they're few and far between and most of them cater to high end audio. The parts tend to be hand-made and expensive. I don't think there are any silicon parts actually manufactured in the US these days. I work for one of the major producers of silicon hardware and all of our manufacturing is done in Taiwan.

[Mark Reccord]

Originally Posted by Jerrold Tiers

Maybe............... but they are essential, AND are added as part of the manufacturing process, unlike the lamp which was the example in the linked definitions.....

The definition is pretty vague, and it might depend on whether the gov'mnt functionary likes you that day.

True enough.

[seamonkey]

Originally Posted by ButtUglyJeff

So, does this eliminate all tube amps from the title "Made in USA"?

The Ampeg way way around that is to claim to use NOS tubes made sometime in the past in the USA.

Another reason the counterfeit market for NOS is abundant.

If you spec US made parts, and your supplier gives you counterfeits, does it count if you close your eyes?