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American Made: What it Means

American Made: What it Means

In recent years, there has been a strong push on American manufacturing and to “Buy American.” The idea is that products fractured by American businesses are quality made and therefore superior.

Sometimes on products, we see the claim “American Made,” “Made in the USA,” or “Assembled in the USA,” and many people don’t know the distinctions between the claims. Below, we’ve outlined the different claims and what they actually mean.

What is American Made?

America is a broad term, as it includes all of the Western hemisphere. North America refers to the United States, Canada, and Mexico, though there are many people who associate the term American made with the United States.

When manufacturers produce products, sometimes resources need to be outsourced from other countries because they are either not present or prevalent in the United States. However, there are a great number of people who want to support their country and businesses by only purchasing products that are American-made. 

The Federal Trade Commission (FTC) exists to prevent deception and unfairness in the marketplace, and one of the things it requires is labeling that states where the products are made from.

Made in the USA

According to the FTC, a product advertised as made in the USA must be all or virtually all made within the country. This means that all of the significant parts and processing that the products contain and undergo must be of U.S. origin. On automobiles, textiles, fur, and wool products, the content of the items must be disclosed in some form.

Other manufacturers and companies don’t have to disclose this, but if they claim to be made in the USA, they still must follow the FTC rules. Failure to do so can lead to them being subjected to penalties.

Assembled in the USA

The claim “Assembled in the USA” can include foreign components, but companies can retain the claim when its principal assembly takes place within the United States. So, all of its components could be imported from a foreign country, but as long as the product was put together within the United States, it can be labeled as assembled in the USA. This is much different from the claim “Made in the USA,” as that claim requires much of the products and processes to take place within the country.

Buy America

Established within Section 165 of the Surface Transportation Assistance Act of 1982, the Buy America Act was a transportation funding and policy act that was created under President Reagan’s Administration. The purpose of this act was to give preference to the use of domestically produced materials on any federal government projects.

This act is usually only applied to mass-transit projects for the state and local governments, like the construction of highways or railways. This statute and its requirements are regulated by the Federal Transit Administration (FTA) and the Federal Highway Administration (FHWA).

Under the Buy America Act, all end products must be 100% manufactured in the U.S. Not only this, but all of the steel and iron components used must be mined, melted, and manufactured in the country. There is an exception, an important one; if foreign-sourced materials are valued at 0.1% of the contract value, their use is allowed.

Waivers for the Buy America Act are unlikely to be given and are granted on a project-by-project basis only if the applications are inconsistent with the public interest or if the steel and iron produced in the U.S. are not in enough quantity or acceptable quality.

Buy American

Passed in 1933 by Congress under President Herbert Hoover, the Buy American Act covers specific products, and it requires the U.S. government to purchase construction materials from agencies within the country. This act created a national preference for the U.S. government to procure only domestic materials for public construction unless a waiver was granted. This applies to direct purchases by the federal government, but not third parties like private contractors given funding through government projects.

The goods and products are only qualified as domestic when they are 100% manufactured in the U.S., with at least 50% domestic content; this means that even though they may have been fully manufactured in the country, half of the materials used within the product must be from the U.S. This puts a great deal of importance on American materials and businesses.

Over the years, many waivers have been given to permit government construction despite the Buy American Act. In recent years, presidents have tried to put more emphasis on the importance of this bill. In 2017, President Trump passed Executive Order 13811, which increased the domestic content to 95%, and in 2021 President Biden released an Executive Order that updated the process to get waivers.

Now that you know the differences between the claims, you’ll have a better understanding of them when you spot them on products.

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