Don’t misread California’s new “Made in the USA” law

Last Wednesday, the state of California loosened its “Made in the USA” law, which had stipulated that 100 percent of a product had to be sourced and manufactured in the United States to carry the label.

The new law, to go into effect Jan. 1, 2016, will more closely align the state with Federal Trade Commission rules, saying that “all or virtually all significant parts and processing that go into the product must be of U.S. origin.”

That’s good news for outdoor industry brands — as they can now follow one standard for all 50 states. But, in reality, the rules don’t change much, and the onus remains on outdoor brands to truthfully disclose their product’s manufacturing to today’s hyper-aware and -connected consumers.

While California’s law was strict, it did allow for qualifying statements: eg. “Made in the USA with imported goods from countries x, y and z.”

Under the FTC’s rules, brands could technically use the “Made in the USA” label without these qualifying statements. However, as SNEWS reported in November 2013, those imported products must be “negligible,” under the FTC’s rules.

Read our Made in the USA explainer here.

Figuring what qualifies as “negligible” cannot be accomplished with a simple formula or percentage. Rather, the FTC handles each instance on a case-by-case basis, typically bringing in other U.S. laws such as the Textile Fiber Products Identification Act and Wool Product Labeling Act.

Long story short, for most products, if any foreign materials are used, brands will have to qualify those imported goods on labeling under FTC regulations, too. Furthermore, similar to the outgoing California law, the FTC does not allow for claims like “100-percent USA Made” if the product isn’t entirely made and sourced in the United States.

Still, many brands are likely to try and test the limits with the short-and-simple “Made in the USA,” without qualifying statements, even if there are some foreign-sourced goods at play.

The biggest deterrent to that move may not be the FTC, however. Rather, the ultimate watchdogs are increasingly savvy U.S. consumers, who stand ready to rile up their followers on social media at any corporate misstep.

While an outdoor brand may gain favor on retail shelves and online shopping carts for that “Made in the USA” marker, if just one blogger does their research to find that the statement is misleading — “Hey, these yarns are made in China!” — then the following social media firestorm and condemnation of the entire brand will end up being a lot more harmful.

Country of a product’s origin isn’t even the final step with today’s consumers. Now, it’s about tracing the very wool fibers and down feathers back to the initial farm, let alone country.

Complete product transparency, as brands like Patagonia and others are discovering, will increasingly be the best policy.

–David Clucas