Source: Blog – Alliance for American Manufacturing

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Sure, make the FTC’s “all of virtually” standard the threshold. But it must be codified into law, too.

Now that the U.S. House of Representatives is back to its regular business, an Energy & Commerce subcommittee on Thursday is holding a markup on 16 bills, including the Reinforcing American-Made Products Act (H.R. 5556). It would “make exclusive the authority of the Federal Government to regulate the labeling of products made in the United States and introduced in interstate or foreign commerce, and for other purposes.”

This is right up the Alliance for American Manufacturing’s (AAM) alley, as we’ve been working for years to ensure that the Made in USA label remains strong and that bad actors are held accountable for making deceptive claims.

So let’s dig in! Proponents of this bill want to give certainty to companies who want to use a Made in USA label on their products. It was first introduced in 2015 in response to a California state labeling law that was stricter than the standard set by the Federal Trade Commission (FTC), and this created issues for well-meaning companies labeling their products Made in USA.

However, that same year California adjusted its statute with a numerical threshold designed to align it with that of the FTC. Thus, in 2023, the utility of this legislation in questionable; it appears to be a solution in search of a problem that has already been solved.

Still, rather than having to keep track of 51 different Made in USA laws, it’s understandable that well-intentioned companies would want to establish a single nationwide Made In America threshold – the FTC’s “all or virtually all” standard.

And fortunately, that standard is a good one because it accurately reflects Americans’ attitudes on Made in USA. We love American-made products.

But, as drafted, H.R. 5556 fails to codify the FTC’s standard and could very easily make Made in USA labels vulnerable to bad actors. It wouldn’t be “reinforcing” anything when it comes to these labels, despite what its name suggests. Instead, it would effectively eliminate existing state-level labeling laws, regulations, and policies and leave the FTC’s “all or virtually all” standard open to attack.

This is why AAM supports truly “reinforcing” the FTC standard by codifying it into law. Currently, the standard is only a rule.

Without codification, H.R. 5556 would make the FTC’s “all or virtually” Made In USA standard supersede all state-level laws, and would also immediately increase the vulnerability of Made in USA labeling. Special interests that want to undermine the entire concept would have one target (rather than 51) on which to focus their lobbying and litigation resources, and the FTC standard would come under intense pressure. And that’s because we’re talking about a standard at the FTC, not a law. A standard can be diluted through rulemaking at the FTC, where commissioners come and go. Made In America labeling could be watered down or riddled with loopholes in the future if there are enough FTC commissioners on hand who don’t like the policy.

The subcommittee’s action on this bill is consequential for all Americans. Consumers place a lot of credibility on these labels, because by shopping for them they can symbolize their support for American workers and American values. If you’re seeking out a Made in USA label, it’s very much like putting your money where your mouth is. Any Made in USA labeling standard should be both strong and accessible for the well-intended market participants who are able to meet its requirements.

Coupled with codification and some clearer drafting, H.R. 5556 has the potential to provide certainty for well-intentioned companies while also “reinforcing” the labeling of American-made products for consumers.

But without codification the risk of passing H.R. 5556, ultimately, is the erosion of Made in USA labeling nationwide. And that risk vastly outweighs any benefits resulting from its enactment.

AAM has written a letter to the subcommittee outlining all these concerns. From our letter:

It is on one hand discouraging that “Made in USA” fraud persists. However, that this fraud persists underscores the value that a “Made in USA” label poses for manufacturers and marketers. We strongly urge that the subcommittee carefully consider the ramifications of any proposed changes to nationwide Made in USA labeling laws and enforcement.

You can read the whole letter here, and tune in to the subcommittee’s markup at 10 am ET on Thursday here.

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