The NAD tells Bashlin to buckle up its “Made in USA” claims

The National Advertising Division of BBB National Programs’ (NAD) latest “Made in USA” (MUSA) decision takes a hard line on the substantiation companies must maintain to support unqualified MUSA claims. Here’s what to know.

The Bashlin Decision

On January 28, the NAD issued a decision finding that Bashlin Industries, Inc. (Bashlin), a manufacturer of equipment and tools for line workers, could not substantiate and should therefore discontinue unqualified MUSA claims in its advertising. Although the opinion addressed and rejected unqualified claims for several products, it particularly focused on unqualified claims for a “climber” with a few parts of unknown origin that, although de minimis by cost, the NAD found sufficiently important to the product to preclude an unqualified claim. 

When it comes to MUSA claims, the NAD relies on the Federal Trade Commission's (FTC) analysis, which has remained largely unchanged since the 1940s. To substantiate an unqualified claim, marketers should be prepared to demonstrate that the advertised product is “all or virtually all” (AOVA) made in USA, all the way back to raw materials. The FTC considers flexible factors to determine whether a product meets this standard, including the percentage of costs attributable to imported materials, how far back in the manufacturing chain the imported content is, and the importance of the imported content to the form or function of the product.

When it came to Bashlin’s climbers, over 95% of the costs to make them were incurred in the USA. The other 5% was apparently attributable to parts of unknown origin, including a one-inch buckle and some screws. The NAD focused closely on that buckle, stating it “serv[ed] an essential function for comfort and proper fit.” Additionally, the NAD noted that the screws helped hold the product together. Together, the NAD concluded, these parts were significant enough to the product to render an unqualified claim unsubstantiated.

On one hand, the FTC's MUSA compliance guidance states that the agency will consider the importance of imported content to the form and function of a product when evaluating whether a MUSA claim for that product deceives consumers. Even when imported content is de minimis by cost, it can be very consequential to consumers. In those cases, unqualified claims may mislead reasonable consumers. However, importance of the imported content is only one of several factors - not necessarily the dominant factor - the FTC considers as part of this analysis.

Bashlin’s is a close call; it’s hard to know whether an unqualified claim would truly deceive consumers under the circumstances. Although comfort and fit are important, based on a facial analysis, it seems unlikely that this content of unknown origin – in the context of a product 95% MUSA – is the type of “essential element” the FTC’s test is intended to cover. Instead, this content seems more like threads and screws that, although important to holding a product together (after all, most products don’t contain extraneous content), are de minimis enough to avoid triggering the need for a qualification. 

This decision is consequential for two reasons. First, it means that making an unqualified claim for a product that incorporates any foreign content at all now places marketers at a high risk of a self-regulatory challenge. Second, on the margins, this newly elevated risk may make investment in re-shoring manufacturing less attractive for some companies. 

Takeaways

This is complicated and you can always call for help. But in the meantime, consider these takeaways:

• Be careful with your express and implied MUSA claims. With this decision, the NAD has recommended discontinuation of a claim for a product with very de minimis (by cost) imported content. If your product contains any content at all that influences how the product works or looks, be advised that an unqualified MUSA claim may invite a challenge, and the NAD may take a hard line.
• Copy test. If you fall into that 95% USA cost corridor and want to make unqualified MUSA claims for your products, consider running consumer perception testing to confirm your claims do not deceive consumers. If you have evidence that consumers interpret your claims as you intend them and you have appropriate supporting substantiation, you will be ready if a challenge comes your way.
• Qualify your claims. Copy testing is expensive. Another option is to use clear, prominent qualifications to explain to consumers what you mean. In this case, if Bashlin had labeled its climbers “Made in USA with Imported Buckle and Screws,” that likely would have passed muster.
• NAD as a backstop. In January 2025, the FTC released a staff closing letter regarding Buckingham’s MUSA claims. Buckingham’s challenge against Bashlin followed shortly thereafter. Even though it is mighty, the FTC is small and has limited resources. It can’t bring enforcement action against every competitor. If you’re the subject of regulatory enforcement and you think competitors doing are the same thing you were taken to task for, a self-regulatory challenge at the NAD is always an option.