TINA’s Take: Made in USA Executive Order Targets Online Marketplaces

WHAT’S UP

Earlier this month, the White House issued an executive order targeting false and deceptive Made in USA claims on online marketplaces. The order calls on the FTC to consider issuing proposed rules that would require that these platforms “establish procedures for verifying country-of-origin claims.”

It does not propose changes to the FTC’s Made in USA standard, which says that in order to market a product as Made in USA, the product must be “all or virtually all” made in the United States, meaning it contains no – or negligible – foreign content.

HOW WE GOT HERE

Despite years of federal inaction with respect to false and deceptive Made in USA claims on online marketplaces, like Walmart, the president’s executive order is now raising the possibility of platform-level liability for unverified seller claims.

Last summer, the FTC sent warning letters to Amazon and Walmart identifying examples of inaccurate U.S.-origin claims on their platforms and urging the companies to “monitor, identify and take corrective action against third-party sellers who make false or misleading ‘Made in USA’ claims” on their sites. But the letters stopped short of making a determination as to whether Amazon or Walmart themselves engaged in illegal conduct.

Now, with the executive order urging the FTC to explore potential rules requiring that online marketplaces verify country-of-origin claims by third-party sellers, companies may soon not be so insulated against inquiries into deceptive Made in USA claims on their platforms.

THE MARKETING PITCH IN QUESTION

Misleading Made in USA marketing is rampant, including on online marketplaces. Walmart, for one, has been the subject of multiple TINA.org investigations that have uncovered hundreds of false and deceptive Made in USA claims on its platform.

Our latest investigation into Walmart, following the FTC’s letter to the company last July, found a number of listings for shot glasses and other glassware masquerading as an American brand on Walmart.com. In reality, the listings were from China-based sellers and the actual American company doesn’t sell its products on Walmart’s site.

Walmart did not respond to a request for comment on our latest findings but previously told us that it “expect[s] sellers and suppliers to provide accurate and honest descriptions about their products.” As with previous Walmart investigations, we alerted the FTC to our findings.

A majority of consumers seek out American-made products and are even willing to pay more for them. Meanwhile, recent tariffs on imported goods – imposed by the same Trump administration – are further increasing demand for products that are made in the USA.

WHAT’S NEXT

It remains to be seen how the FTC responds to the executive order. But some Congress members have already weighed in. After the president signed the order, U.S. Senator Tammy Baldwin of Wisconsin called on the administration to rally support for a bill that would require country-of-origin information to be clearly and conspicuously disclosed on all online product listings.

What remains clear is that online marketplaces have been turning a blind eye to deceptive third-party claims on their platforms. If entities like Walmart and Amazon are able to profit off the products sold by third parties, they should also be held accountable when claims for those products mislead consumers.

Find more of our coverage on Made in USA.