Last week, Senators Mike Lee (Republican, Utah) and Angus King (Independent, Maine) introduced a bill to amend 15 U.S.C. 45a to codify a "national standard" for country-of-origin labeling. Such a standard would make it so that the federal government has the authority to set the standard for labeling products "Made in USA."
Generally, "Made in USA" claims are regulated by the Federal Trade Commission (FTC), which imposes an "all or virtually all" standard on products seeking a US-origin label, meaning all or virtually all of the product must be made in the USA for the claim to be proper. The FTC published a proposed rule in July 2020 seeking to codify its long-standing enforcement policy though no final rule has been issued. The perennial complaint against the FTC's "all or virtually all" standard is that it is ambiguous and lacks specific guidance on what the threshold actually is.
The bill introduced by Senators Lee and King, titled the "Reinforcing American-Made Products Act" (RAMPA), does not attempt to address the ambiguities in the FTC's standard. Rather, RAMPA seeks to bring all states under the requirements of the FTC's standard, preempting any divergent state laws that have set their own standards for "Made in USA" claims. For instance, California has unique legislation governing "Made in USA" claims that is stricter than the FTC's rules and which sets quantitative thresholds for how much foreign content is permitted in a product. Previous to the quantitative thresholds, California operated under a "zero-tolerance" framework for US-origin claims, prohibiting such claims if any fraction of the product had been entirely or substantially made outside of the U.S.
Should RAMPA be enacted, it would supersede any conflicting state law scheme for "Made in USA" claims. A nearly identical version of RAMPA was also proposed by Senators Lee and King last summer which passed the Senate with bipartisan support but went no further. Under the Biden Administration, RAMPA may have more momentum this time around.
The Biden Administration has articulated a broad agenda to protect domestic industry and support American manufacturing and is making good on promises set out under that agenda. For example, in late January, President Biden signed a "Made in America" Executive Order (EO) that is aimed at increasing federal spending on American-made products under programs like "Buy American" and "Buy America". The Buy American and Buy America programs have their own standards for qualifying products as American-made that are significantly less stringent than the FTC's "all or virtually all" standard (though complex in their own right), so the EO is not directly applicable to RAMPA's scope. However, such action signals that the Biden Administration is taking seriously its schedule under its "Made in America" agenda; an agenda which encompasses a crackdown on the misuse and abuse of Made in USA" claims. President Biden made clear in his Biden Plan that the Administration intends to target false advertising associated with "Made in USA" claims and supports increased, more aggressive enforcement by the FTC against parties in violation. The Administration's stance gives steam to RAMPA's efforts to make uniform the standard for "Made in USA" claims as uniformity aids both compliance and enforcement.
Should you have any questions on "Made in USA" claims under either the FTC's "all or virtually all" standard or the Buy America and Buy American programs, please contact an attorney at Barnes, Richardson & Colburn LLP.