FTC Cracks Down on Misleading "Made in USA" Claims Online

The US FTC is demanding better policing of "Made in USA" online sales claims. The agency is focusing on retailers like Walmart, which must ensure that products bearing the label are manufactured entirely in the US. Failure to comply could result in fines and damage to brand reputation.

The Federal Trade Commission (FTC) has issued warning letters to Amazon and Walmart, urging them to more rigorously police "Made in USA" claims on their online marketplaces. The FTC, in a statement released on July 2, 2025, highlighted concerns that third-party sellers on both platforms may be falsely advertising products as being made in the United States when they are not [1].

Christopher Mufarrige, director of the FTC's consumer protection bureau, stated, "Bureau staff have received information that third-party sellers on your online marketplace may be falsely advertising products as being made in the United States." The letters request that Amazon and Walmart monitor, identify, and take corrective action against third-party sellers who make false or misleading "Made in USA" claims [1].

The FTC's regulations, finalized in 2021, specify that products can only be labeled as "Made in the United States" if the "final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and all or virtually all ingredients or components of the product are made and sourced in the United States" [1].

Walmart, in response to the FTC's concerns, is expanding its annual "Open Call" event to include innovative technologies that enhance U.S. manufacturing. The event, set for October 7-8, 2025, will provide an opportunity for small businesses and entrepreneurs to showcase their U.S.-made, -grown, or -assembled products and technologies [2]. This initiative aligns with Walmart's broader commitment to increase the percentage of products made, grown, or assembled in the U.S. to 86% by 2025 [2].

However, the rising costs of manufacturing in the U.S. due to tariffs have led many retailers and manufacturers to reconsider their production strategies. Companies like Plufl, which makes "dog beds for humans," found that producing in the U.S. was significantly more expensive than manufacturing in China, leading them to maintain their Chinese production despite the tariffs [3]. Similarly, Bugaboo, a manufacturer of baby gear, faced the challenge of relocating its production from China to the U.S., which would require substantial investment and time [3].

The FTC's actions aim to ensure that consumers are not misled by false claims and that retailers maintain their brand integrity. Failure to comply with the FTC's guidelines could result in fines and potential damage to brand reputation [1]. As retailers like Amazon and Walmart continue to expand their online marketplaces, the need for stringent policing of product claims becomes increasingly critical.

References:
[1] https://www.mediapost.com/publications/article/407250/ftc-urges-amazon-and-walmart-to-police-made-in-us.html
[2] https://theshelbyreport.com/2025/07/02/walmart-releases-application-period-for-open-call-product-event/
[3] https://www.reuters.com/business/they-tried-made-usa-it-was-too-expensive-their-customers-2025-07-02/