The FTC Just Sent Made in USA Warning Letters to Seven Companies: What Small Manufacturers and Sellers Must Prove Before Using the Label

"Made in USA" sells. It also invites a letter from the Federal Trade Commission if you cannot prove it.

In early July 2026, the FTC sent warning letters to seven companies over unqualified Made in USA claims — a reminder that the label is not a marketing choice, it is a legal standard with a specific test and specific paperwork. For a small manufacturer, contract assembler, or private-label seller, the warning is useful: it shows exactly what the FTC thinks counts as a violation and what you should have in your file before you print the claim on a box, a listing, or an ad.

This guide explains the FTC's Made in USA standard, the difference between qualified and unqualified claims, and how a small business should document its supply chain so the claim survives a challenge.

The Standard: All or Virtually All​

The FTC enforces Made in USA under its authority to prevent deceptive acts or practices. An unqualified claim — "Made in USA" with no qualifier — means the product is "all or virtually all" made in the United States.

That does not mean 100% of cost, but it is close. The FTC looks at three factors:

1. Final assembly or processing is in the United States. If the product is assembled abroad and only packaged here, it fails.
2. A significant part of total manufacturing cost is US content. The FTC weighs the proportion of US manufacturing costs — not just materials, but direct labor and other manufacturing costs — against foreign content. There is no bright-line percentage in the rule, but enforcement history treats claims with more than a de minimis foreign content as vulnerable.
3. Foreign content, if any, is far removed from the finished product and insignificant. A small imported component that is substantially transformed in the US (for example, imported steel that is cast, machined, and finished domestically) is more likely to be considered US content than a finished imported subassembly that is just bolted on.

A qualified claim is narrower: "Made in USA with imported parts," "Assembled in USA from imported components," or "Made in USA of US and imported materials." Qualified claims must still be truthful and not overstate US content. "Made in USA" with an asterisk that says "with globally sourced materials" in tiny type is not a safe harbor if the main claim is unqualified on the front of the package.

Why Warning Letters Matter More Than Fines — for Now​

The FTC's July 2026 letters were warning letters, not complaints or consent orders. They put the recipients on notice and create a paper trail: if the same company makes the same unqualified claim later, the FTC can seek civil penalties.

For a small business, the warning-letter pattern is the real signal:

• The FTC is actively monitoring marketplaces and company websites, not just responding to competitor complaints
• The focus is on unqualified claims on product pages, packaging, and ads, especially where the product's bill of materials shows significant imported components
• The remedy is substantiation, not just removing the words. You must have a reasonable basis for the claim at the time you make it

A competitor or a marketplace can also act. Amazon, Walmart, and other platforms have their own Made in USA attestation requirements and can delist a product while you prove the claim.

What Counts as Proof​

If you claim Made in USA, you should have a file — physical or digital — that would satisfy an FTC investigator. Keep it for as long as you make the claim, plus at least three years after you stop.

A defensible file contains:

Bill of materials with origin. For each SKU that carries the claim, list every component, material, and subassembly, its country of origin, and its cost. Use supplier invoices and certificates of origin, not assumptions. If a component's origin is unknown, treat it as foreign.

Cost allocation. Show the US vs. foreign split of total manufacturing cost: direct materials, direct labor, and factory overhead attributable to the product. Many small manufacturers track only material origin; labor and overhead are part of the test.

Assembly and processing records. Work orders, routings, and time records showing final assembly in the United States, plus any substantial transformation of imported inputs. Photographs of the line and the finished good help, but the records control.

Supplier attestations. Annual letters from key suppliers stating country of origin for the materials they provide, updated when sourcing changes. A one-time attestation from 2022 does not cover a 2026 sourcing switch to a foreign substitute.

Label and claim inventory. A list of every place the claim appears — packaging, e-commerce title, bullet points, A+ content, ads, and social — so you can update all of them if sourcing changes.

Update the file quarterly and whenever you change suppliers, move a process offshore, or substitute a component. A claim that was true in January can become false in June after a cost-driven sourcing change.

Common Ways Small Businesses Get It Wrong​

Buying a US-made component that is itself mostly imported. You buy a "US-made" motor from a domestic distributor, but the motor was assembled abroad. Your product's foreign content includes that motor's foreign content. You must look through the supply chain one level down.

Assembly vs. finishing. Importing a finished product and adding a label, a screw, or a bundle does not make it Made in USA. The FTC has called that out explicitly.

Private label and contract manufacturing. If you private-label a product made by a contract manufacturer, you are responsible for the claim. Your contract should require the manufacturer to certify origin and costs, and to notify you of changes.

Qualified claims that still mislead. "Made in USA with global materials" can still be deceptive if the product is mostly imported and the qualifier is hidden. The qualifier must be clear and conspicuous, and the overall net impression must not be "all US."

What to Do If You Receive a Warning Letter​

If you get a letter, do not ignore it, and do not just delete the words and move on:

1. Preserve the letter and your current substantiation file. Do not destroy drafts or old BOMs.
2. Stop the unqualified claim immediately on all channels while you review
3. Conduct the all-or-virtually-all analysis with your current BOM and costs. If you cannot support an unqualified claim, switch to a qualified claim or remove the claim
4. Reply by the deadline. The letter will ask for a response and, often, a plan to come into compliance. A timely, documented response reduces the risk of a later penalty
5. Fix the root cause. If sourcing drove the problem, either reshore the content or keep the qualified claim

Even if you did not receive a letter, use the seven-company warning as a prompt to audit your own catalog. The FTC published the fact of the letters; the legal standard applies to everyone.

Bookkeeping That Makes the Claim Auditable​

Your books are the backbone of the Made in USA file. If you cannot show US vs. foreign cost, you cannot prove the claim.

• Track inventory by origin. Use your accounting system to tag purchased components by country of origin and cost. When you issue materials to a work order, the origin flows to the finished good.
• Allocate labor and overhead by product. If you make multiple SKUs, allocate direct labor and factory overhead on a consistent, documented basis — not ad hoc at year-end.
• Reconcile BOM cost to actual cost. Standard BOM cost vs. actual purchase price and scrap should reconcile monthly. A variance that pushes foreign content over the threshold should trigger a claim review.
• Version your BOMs. Every time a component changes origin or price, create a new BOM version with a date. That lets you show what the product's origin profile was on the date a specific claim was live.

Plain-text, version-controlled records make this easier: a diff shows when a component switched from domestic to imported and whether the claim changed at the same time.

If the Claim Is Qualified, Price It Honestly​

A qualified claim may be less valuable for marketing, but it is still valuable if it is true. "Assembled in USA from US and imported components" tells a customer that final quality control and labor are domestic, which many buyers care about, without overstating content. Do not treat a qualified claim as a consolation prize — treat it as the accurate claim your sourcing supports.

If your goal is to move toward an unqualified claim, the BOM and cost file tells you what to reshore. The cheapest path is often one high-cost imported component that, if sourced domestically, flips the all-or-virtually-all math.

Keep Your Finances Organized From Day One​

Made in USA is a marketing asset and a compliance commitment. The businesses that keep it are the ones that can show, in numbers and in supplier letters, that the product really is all or virtually all made here.

Beancount.io gives you plain-text, version-controlled accounting where every component purchase, work order, and cost allocation is a line you can audit and diff. When the FTC — or a marketplace — asks what is behind the label, your books are the answer. Get started for free and build a supply-chain record that makes the claim as sturdy as the product.