As tariffs reshape supply chains, more Americans may be checking packaging for the “Made in USA” label, either to sidestep import taxes or to support domestic businesses.
But intricate trade rules and far-flung manufacturing networks can mean the country-of-origin stamp may tell only part of the story.
The label “Made in USA” has a specific meaning: it indicates that all or virtually all of a product — including its parts and assembly — must originate in the United States.
However, the term “virtually all” does not mean that everything has to be U.S.-made.
“‘Made in U.S.A.’ is a very specific, very high standard,” says Marcus Eeman, senior manager of customs at global logistics firm Flexport.
According to the Federal Trade Commission, which oversees country-of-origin claims in marketing and advertising, to qualify for the label, U.S. authorities must determine that a product’s final assembly or processing has taken place in the U.S.
Additionally, a significant portion of its manufacturing costs must also be incurred domestically.
Eeman explains, “You probably will never see a car that says ‘Made in America,’ but you will see it that says ‘Assembled in America,’ probably with some foreign components as well.”
Despite this, some foreign components are allowed to still qualify as “Made in U.S.A.” as long as they don’t substantially transform the product.
Eeman elaborates that this concept dates back to a 1908 Supreme Court case involving Anheuser-Busch, which used cork from Spain to cap beer bottles.
The Court ruled that the cork didn’t transform the product, since it didn’t change the beer’s name, character, or use.
Determining a product’s country of origin through the “substantial transformation” test can be tricky.
Eeman cites a case involving a bulk block of lipstick material shipped from Italy to China.
In China, the block was melted, shaped, and packaged, but ultimately, U.S. Customs and Border Protection (CBP) ruled that the country of origin was still Italy.
The U.S. Department of Commerce’s International Trade Administration provides further examples.
Ingredients such as sugar, flour, dairy, and nuts can be imported, but once they are baked into cookies in the U.S., the final product is considered substantially transformed and may carry a “Made in USA” label.
However, bilateral trade agreements can override these rules.
Under the United States-Mexico-Canada Agreement (USMCA), for example, a one-time importation of a commercial product valued under $2,500 is exempt from country of origin labeling requirements.
Another term in the discussion is “Assembled in USA.”
The FTC states, “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.”
Not all assembly methods count, however.
The FTC specifies that a simple “screwdriver operation” does not qualify.
For instance, if components like a motherboard and hard drive are imported and merely assembled into a computer in the U.S., they would not justify an “Assembled in USA” label.
A more accurate claim in this case might be “Made in U.S. from Imported Parts.”
Things become increasingly complicated when it comes to food products, particularly pork and beef.
In 2015, Mexico and Canada successfully challenged U.S. country of origin labeling (COOL) requirements for these meats at the World Trade Organization (WTO).
The WTO found that requirements mandating labeling for muscle cuts and ground pork and beef unfairly disadvantaged foreign producers, resulting in Congress repealing COOL requirements for those meats.
As a result, “Beef and pork, which were once required to be labeled, [now] don’t have any country of origin labeling requirements,” states Thomas Gremillion, director of food policy at the non-profit Consumer Federation of America.
He further explains this means a cow may spend its life in Mexico, be shipped across the border, slaughtered the same day, and still be labeled as a “Ground beef product of the USA.”
Still, Pam Lewison, agriculture research director at the Washington Policy Center, points out that most U.S. meat is produced domestically.
For other food items, however, the complexity remains.
Lewison emphasizes, “Ideally, you want to see a label that says the product was made, produced, and sourced from the United States.”
Yet, she adds a note of warning for consumers: “If you’re buying asparagus in December, you shouldn’t fool yourself about where it’s coming from — it’s not coming from here.”
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