Turning up the heat on Made in USA: A new EO ups the ante

On Friday, March 13^th, the White House issued a new Executive Order (EO) directing the Federal Trade Commission (FTC) to crack down on marketers making false or misleading “Made in the USA” (MUSA) advertising claims. Expect an increase in enforcement activity and potential rulemaking to follow.

What the EO does

Framed as an important step toward implementing the Administration’s goal of putting America First, the EO does not create any new requirements. However, it highlights four policy goals that, if implemented, will dramatically change the risk and compliance analysis associated with MUSA advertising claims. It also sets the stage for nominee David MacNeil to hit the ground running with his MUSA platform if confirmed to serve as FTC Commissioner.

1. Increased enforcement action.

The EO emphasizes that the FTC should prioritize bringing enforcement actions against marketers that falsely claim their products are MUSA. 

While the current FTC has stated that MUSA is a priority, we haven’t seen any case announcements since 2024. The Administration has signaled this must change. Expect the Agency to respond by carefully canvassing the marketplace for enforcement targets.

2. Rules for marketplace claim verification.

The EO also directs the FTC to consider issuing a new rule relating to MUSA, but perhaps not the rule you might expect. 

The FTC’s MUSA Labeling Rule, 16 C.F.R. Part 323, requires marketers to be able to prove that products labeled as MUSA are “all or virtually all” MUSA, all the way back to raw materials. Close watchers may have expected the Agency to consider whether this standard remains appropriate in today’s global economy. 

But the EO contemplates a different rule entirely. It directs the FTC to consider a rule requiring online marketplaces to establish procedures to verify country-of-origin claims.

The EO doesn’t specify what those procedures would look like, possibly to avoid entanglement with the complexities of Section 230 of the Communications Decency Act, which limits platforms’ liability for third-party content. Instead, it seems to contemplate a simple rule providing that failure to maintain such a program may constitute an unfair or deceptive act or practice.

3. Voluntary MUSA labeling. 

The EO sweeps in other agencies, recommending that all agencies with oversight over country-of-origin labeling consult with the FTC Chairman to consider issuing rules promoting voluntary MUSA labeling.

Currently, laws and regulations enforced by Customs and Border Protection (CBP) require imported products to be labeled with their foreign country of origin. But, for most non-textile and non-wool products substantially transformed in the USA (that is, products that are not considered to be imported under CBP law), there’s no requirement to label them with any particular origin. 

Encouraging voluntary MUSA labels may give U.S. manufacturing a boost. But it also risks pushing companies with a limited understanding of the FTC’s rules to label products as MUSA when they don’t actually comply with the FTC's rigorous standard, increasing the likelihood of enforcement actions.

4. Review Buy American compliance. 

Aside from the FTC-related directives, the EO instructs agencies involved in government acquisitions to increase vigilance of Buy American Act compliance. Those agencies are directed to remove noncompliant products from procurement programs and refer vendors to the Department of Justice to pursue actions under the False Claims Act, 31 U.S.C. § 3729 et seq.

What the EO means for your business

Although the EO doesn’t impose new legal requirements, it suggests MUSA compliance should be top of mind. We’ll continue to monitor for updates, but, for now, here are our top tips:

Manufacturers and Sellers: Review your MUSA claims now. Ensure accuracy and FTC compliance. Expect aggressive enforcement.

Online Marketplaces: Expect new verification requirements for third-party seller origin claims. Consider proactive compliance now.

Government Contractors: Audit supply chains immediately. False origin claims risk False Claims Act exposure, which can mean significant penalties.