American manufacturing is having a bit of a moment in 2017, thanks in large part to some close attention from the White House. President Trump rode into office on the promise of a greater American manufacturing industry, and millions of workers are eager to see him deliver on those promises.
To that end, President Trump recently hosted “Made in America” week at the White House, where he celebrated American-made goods. But what exactly does it mean when an item is designated as “Made In The USA?” It’s a lot more complicated than you may think.
Somewhere around 50% of products “Made In America” require welding, but the Federal Trade Commission is actually the body that determines who earns this coveted label. No matter how much welding or American labor went into the product, the label doesn’t say “Assembled in the USA” or “Mostly Made in America.” What determines that is the percentage of American made parts that go into it.
According to the FTC’s website, “all significant parts and processing that go into the product must be of US origin. That is, the product should contain no — or negligible — foreign content.”
How high does that percentage have to be in order to get the “Made In The USA” label attached to it? Over 50%, or more, depending on the product being considered. It can be assembled anywhere, even China, but as long as the products are mostly American, it gets the label.
This designation is not considered, however, when it is the U.S. government that is the purchaser. The U.S. government is required to purchase only American made goods, if possible, according to the 1933 Buy American Act that was signed by President Hoover.
There are some additional requirements when it concerns items like cars and textiles. Cars are complicated by outside factors that are defined in the “American Automobile Labeling Act.” Per law, in addition to where the car was assembled, auto makers are required to list what percentage came from the U.S. or Canada, and what country the transmission came from in particular.
The U.S. and Canada are considered as “together” for this instance, and anything 70% or more from these countries is rounded up to “100% American/Canadian.”
So that’s the legal definition of what that “Made In The USA” label means. It doesn’t mean that the product was completely assembled here, or that all its parts were created here. Even so, it’s a difficult label to earn, which is why it has so much value to so many Americans.