USA Made Products

The Federal Trade Commission (FTC) enforces strict rules for "Made in USA" labeling to prevent deceptive claims and protect consumers. These rules are codified in the **Made in USA Labeling Rule** (16 CFR Part 323), effective August 13, 2021. Below is a summary of the key requirements for making unqualified "Made in USA" claims on product labels:

Requirements for Unqualified "Made in USA" Claims
To label a product as "Made in USA" without qualification, the following three conditions must be met:

1. Final Assembly or Processing in the U.S.
The final assembly or processing of the product must occur in the United States. 2. All Significant Processing in the U.S.
All significant processing that goes into the product must take place in the United States.

3. All or Virtually All Components U.S.-Sourced
All or virtually all ingredients or components of the product must be made and sourced in the United States. This means the product should contain no or negligible foreign content. The FTC evaluates factors such as:
The percentage of total manufacturing costs attributable to U.S. parts and processing. The "remoteness" of foreign content (how far removed it is from the finished product).

Key Points
"All or Virtually All" Standard:
The FTC’s standard is stringent, requiring that the product contains negligible foreign content. There is no bright-line percentage rule (e.g., 95% U.S. content), as the FTC assesses claims case-by-case to prevent deception. For example, even a small but essential imported component (like a clip in a diaper cleaning device) may disqualify an unqualified "Made in USA" claim if it’s material to consumers.

Applies to Labels and Promotional Materials:
The rule applies to labels on products, including seals, marks, tags, or stamps, as well as mail order catalogs and promotional materials (e.g., online ads) that claim "Made in USA."

Express and Implied Claims:
The rule covers both explicit claims (e.g., "Made in USA," "American-Made") and implied claims (e.g., U.S. flags or phrases like "True American Quality") that suggest U.S. origin. The FTC evaluates the overall impression conveyed to consumers.

Substantiation Required:
Marketers must have a reasonable basis to substantiate their "Made in USA" claims at the time the claim is made, supported by competent and reliable evidence (e.g., cost of goods sold, inventory costs, or supplier documentation).

Qualified Claims:
If a product does not meet the "all or virtually all" standard, marketers can use qualified claims, such as "Made in USA with imported materials" or "Assembled in USA with 70% U.S. content," provided they are truthful and substantiated.

Exceptions and Exemptions **No Pre-Approval Required**:
The FTC does not pre-approve "Made in USA" claims, but marketers must ensure claims are truthful and substantiated.

Exemptions:
Marketers can petition the FTC for partial or full exemptions if they can demonstrate that their unqualified claims are not deceptive. The FTC resolves such petitions under 16 CFR 1.31.

Additional Considerations **No Mandatory Labeling for Most Products**:
Unlike specific products (e.g., automobiles, textiles, wool, fur), there is no general requirement to label products as "Made in USA." However, if a claim is made, it must comply with FTC rules.

Textile and Apparel Specifics:
For textiles and apparel, the FTC requires labels to disclose fiber content, country of origin, and manufacturer identity (via a Registered Identification Number or company name). Imported textiles must clearly indicate the country of origin in English, and labels must be permanent.

For further details, visit the FTC’s Made in USA guidance page at https://www.ftc.gov/musa.

Buying cheap foreign products can harm American companies in several ways:

Lost Revenue and Market Share: When consumers opt for cheaper foreign goods, American companies lose sales, reducing their revenue and market share. This can weaken their financial stability and limit funds for reinvestment in innovation or expansion.

Job Losses: Reduced demand for American-made products can lead to layoffs or downsizing in domestic companies, particularly in industries like manufacturing. This impacts workers and local economies dependent on these jobs.

Price Pressure: Foreign products, often cheaper due to lower labor costs or fewer regulations, force American companies to lower prices to compete. This can erode profit margins, making it harder to sustain operations or invest in quality improvements.

Erosion of Domestic Industries: Over time, consistent preference for foreign goods can shrink entire industries, like steel or textiles, reducing U.S. production capacity and expertise. This can make the country more reliant on imports, posing risks to economic security.

Innovation Stagnation: With less revenue, American companies may cut R&D budgets, slowing innovation. Foreign competitors, meanwhile, may gain technological advantages, further challenging U.S. firms.

Supply Chain Vulnerabilities: Dependence on foreign goods can expose the U.S. to supply chain disruptions, as seen during global crises like COVID-19, which can indirectly harm American companies reliant on those supply chains.

Short Answer: 5 million manufacturing jobs and $25-30 trillion dollars.

Details:
In Jobs
Over the last 50 years (from approximately 1975 to 2025), the U.S. has experienced a net decline in manufacturing employment of about 6-7 million jobs, from a level of around 18-19 million in the mid-1970s (peaking at 19.6 million in 1979) to roughly 12.7 million as of mid-2025. However, not all of this decline represents a direct shift to foreign production—much is attributable to productivity gains through automation and efficiency improvements, which allowed U.S. manufacturing output to roughly double over the same period while employing fewer workers.

The portion specifically attributed to offshoring, globalization, and trade imbalances (i.e., production shifted abroad) is estimated at approximately 5 million jobs. This figure draws from analyses of trade deficits and offshoring trends:

Since 1997-1998, about 5 million manufacturing jobs have been lost due to growing trade deficits in manufactured goods, particularly with China, Mexico, Japan, and the European Union.

Pre-1997 losses were smaller and more tied to recessions and early globalization waves (e.g., with Japan in the 1980s), adding perhaps 0.5-1 million more to the offshoring tally.

Key contributors include multinational companies offshoring intermediate inputs (accounting for ~13% of the 2000s decline) and specific trade relationships, such as the U.S.-China trade deficit since 2001, which alone displaced about 3.8 million jobs, mostly in manufacturing.

These estimates come from sources like the Economic Policy Institute (EPI) and academic studies, which use models linking trade imbalances to job displacement. Note that total U.S. employment grew by over 80 million jobs in non-manufacturing sectors during this period, offsetting the losses economy-wide.

In Dollars
The economic value of manufacturing shifted abroad can be approximated by the cumulative U.S. trade deficit in goods (primarily manufactured goods, as agricultural trade is often balanced or in surplus, and mineral fuels like oil account for a varying but smaller portion of the deficit). This deficit represents the net value of manufactured production imported rather than produced domestically.

Over the last 50 years, the cumulative goods trade deficit is approximately $25-30 trillion in nominal dollars (unadjusted for inflation). Here's how to arrive at this:

From 1975 (the last year of a small goods trade surplus) to 2017, the cumulative goods trade deficit was roughly $18-19 trillion, equivalent to about 96% of 2017 U.S. GDP (~$19.5 trillion).

From 2018 to 2025, annual goods deficits averaged around $1-1.2 trillion per year (e.g., ~$1.3 trillion in 2022, ~$1.2 trillion in 2024), adding another ~$8-10 trillion.

Total: ~$26-29 trillion. For manufactured goods specifically (excluding oil and agriculture), the figure is slightly lower, around $20-25 trillion, as oil imports contributed significantly to the goods deficit in earlier decades (peaking in the 2000s) but have declined with U.S. energy production growth.

This cumulative figure reflects the net excess of imports over exports, indicating the scale of production shifted abroad. Annual deficits started small (~$9 billion in 1976) and grew dramatically post-2000 due to globalization, reaching peaks over $1 trillion in recent years. Sources like the U.S. Bureau of Economic Analysis (BEA), Census Bureau, and economic reports (e.g., from Brookings and EPI) provide the underlying data and models for these calculations.

These are approximations based on available data; exact figures vary by source due to methodological differences (e.g., whether including services or adjusting for re-exports). The shift has accelerated since the 1990s with trade agreements like NAFTA and China's WTO entry in 2001.

Overview of Recent US Tariffs
In 2025 the US implemented a series of tariffs aimed at addressing trade imbalances, national security, and issues like fentanyl trafficking. Key measures include:
February 2025: 25% tariffs on imports from Canada and Mexico (non-USMCA compliant), and 10-20% on China, initially tied to border security and fentanyl.
March 2025: Expansions to steel, aluminum, and autos (25% on all autos, exempting US content).
April 2025: Broad "reciprocal" tariffs under the International Emergency Economic Powers Act (IEEPA), starting at a 10% baseline on most countries, with higher rates (up to 125% initially on China, later adjusted) for over 50 trading partners based on trade deficits and reciprocity. Exemptions apply to pharmaceuticals, semiconductors, certain minerals, and USMCA-compliant goods from Canada/Mexico.

Subsequent Adjustments: By May-August 2025, some pauses (e.g., 90-day extensions), deals (e.g., with UK), and reductions (e.g., China rates lowered from 145% to lower levels), but overall rates remain elevated. The average effective tariff rate reached 18.6% in early August, the highest in over 90 years, though down to 17.8% by mid-May after adjustments.

These tariffs have generated significant revenue (e.g., $28 billion in June alone, triple 2024 levels) but have also sparked retaliation from partners like China, Canada, and the EU, exacerbating effects.

Economic Impacts Based on Recent Data
Data from government reports, think tanks, and market analyses as of August 2025 show predominantly negative effects, though some short-term boosts in specific sectors. Tariffs act as a tax on imports, largely passed to US consumers and businesses, reducing purchasing power and economic efficiency. While proponents argue they protect domestic industries and raise revenue, evidence indicates higher costs, slower growth, and increased uncertainty outweigh benefits for most Americans.

Inflation and Consumer Prices
Tariffs have driven up prices, with pass-through rates near 100% in many cases. Recent data:
Import prices rose 0.55% since "Liberation Day" (early 2025), in the 80th percentile historically but not yet disruptive.
Overall consumer prices up 2.3% short-term, equating to a $3,800 annual loss per household (2024 dollars). Average household tax increase: ~$1,300 in 2025.
Specific examples: Pepsi prices +10%, PlayStation 5 +$50, cars potentially +$10,000.
Inflation expectations: University of Michigan one-year-ahead at 4.9% (28-month high). Fed forecasts core CPI at 2.8% for 2025, up from prior estimates.
Not fully materialized yet; front-loading of imports mitigated early impacts, but sustained hikes could lead to stagflation.

GDP and Growth
Tariffs reduce output by disrupting supply chains and raising costs. Projections:
Short-run: GDP growth -0.5 to -0.9 percentage points in 2025, with overall US GDP -0.6% to -1.0%.
Long-run: GDP -0.4% to -8%, equivalent to $100-180 billion annual loss (2024 dollars). Welfare declines ~2-4%.
Recession probability: 60% per JP Morgan. Global growth downgraded to 1.4% Q4 2025.
Sectoral shifts: Manufacturing output +1.5%, but agriculture -1.1%, construction -3.1%. Hurts agriculture and durable goods most.

Employment and Wages
Unemployment: +0.35-0.4 percentage points by end-2025.
Payrolls: -456,000 jobs. Layoffs rising in affected sectors.
Wages: -5% to -7% long-run. Middle-income households face $22,000-$58,000 lifetime loss.
Uncertainty: Economic Policy Uncertainty Index doubled since January, reducing investment ~4.4% in 2025.

Trade and Deficits
Trade deficit: Worsening; imports down, but exports down more (e.g., -15.5% long-run). June deficit shrank 16% month-over-month, but overall imbalance persists.
Global reallocations: US-China direct trade collapsing; indirect exports less affected. Hurts US agriculture ($124 billion in costs so far).

Stock Market and Business Sentiment
Volatility: Sharp drops post-announcements; $5.4 trillion wiped off in two days after April rollout. Nasdaq near correction.
Business impact: Sales declines 9-13% in Q2; rising bankruptcies. Companies in "survival mode".
Dollar: Weakened since February.

Fiscal Effects
Revenue: +$2.7-5.2 trillion over 2026-35 (conventional), but -$394-700 billion dynamic loss from lower output.
Deficits: Could widen if recession hits, despite tariff income. Regressive: Burdens lower/middle classes most.

Broader Considerations
While some data shows muted early effects (e.g., no soaring inflation yet), full impacts may emerge later as inventories deplete and retaliation escalates. Models suggest tariffs harm the US more than partners, with alternatives like targeted measures potentially less damaging. Public sentiment reflects pain from price hikes, though some view tariffs as necessary for security.