California Modifies 'Made in USA' Labeling Standards to Align with FTC Guidelines

What's Happening?

California has updated its stringent 'Made in USA' labeling standards to more closely align with the Federal Trade Commission (FTC) guidelines. Previously, California law required nearly 100% of a product's content to be domestically sourced to qualify for the 'Made in America' label. The new standard, effective January 2016, allows products to be labeled as 'Made in USA' or 'Made in America' if foreign materials or parts do not exceed five percent of the final wholesale value. If manufacturers can demonstrate that certain materials or parts are unavailable in the U.S., the foreign content can be up to ten percent. This change aims to provide more flexibility for manufacturers while maintaining consumer trust in the 'Made in USA' label.

Why It's Important?

The modification of California's labeling standards is significant for manufacturers and consumers alike. It provides manufacturers with greater flexibility in sourcing materials, potentially reducing costs and encouraging domestic production. For consumers, it ensures that products labeled 'Made in USA' still predominantly consist of domestic content, maintaining the integrity of the label. This change could lead to increased consumer confidence and support for American-made products, potentially boosting the local economy and job market. Additionally, aligning with FTC guidelines helps standardize labeling practices across states, reducing confusion and ensuring consistency in product labeling.

What's Next?

Manufacturers will need to adjust their labeling practices to comply with the new standards, potentially revisiting their supply chains to maximize domestic content. The FTC and California authorities may increase monitoring and enforcement to ensure compliance with the updated guidelines. Consumers can expect clearer labeling and potentially more products labeled as 'Made in USA' as manufacturers adapt to the new rules. This change may also prompt other states to reconsider their labeling standards, leading to broader national consistency.