FTC Launches Major Enforcement Wave Against Unsubstantiated 'Made in USA' Product Claims Following Executive Order

If you are paying a premium for a product because it bears a 'Made in USA' label, the federal government is now aggressively ensuring you get what you pay for. Following a March 2026 Executive Order, the Federal Trade Commission (FTC) has launched a major enforcement wave against companies that use patriotic marketing to sell goods assembled from foreign parts. For consumers, the crackdown means greater transparency; for manufacturers, it means six-figure penalties for deceptive labeling.[1][2]

The enforcement centers on the FTC's strict 'all or virtually all' standard. To legally use an unqualified 'Made in USA' label, a company must prove three things: the product's final assembly occurs in the United States, all significant processing takes place domestically, and all or virtually all of its components are sourced within the country. If essential parts come from overseas, the label is illegal.[3][4]

The financial stakes for violating this rule have never been higher. In an April 2026 enforcement sweep, the FTC announced three major settlements with companies that allegedly deceived buyers through false origin claims, signaling a zero-tolerance approach to 'origin washing.'[1][5]

The largest penalty targeted TouchTunes Music Company, a manufacturer of electronic dartboards. TouchTunes agreed to pay $625,000 in consumer redress—the largest monetary relief in a Made in USA Labeling Rule case to date.[1][5]

The TouchTunes case establishes a critical boundary: domestic assembly does not equal domestic origin. While TouchTunes completed the final assembly of its dartboards in the United States, the FTC found that essential components—including computer chips, cameras, and flatscreen monitors—were manufactured overseas.[2][4]

A second action penalized Americana Liberty LLC and Three Nations LLC, sellers of American flags and patriotic display products. The FTC alleged the companies marketed their goods with phrases like '100% American Made Tough,' even though several of their products were wholly imported from China.[1][5]

Americana Liberty agreed to a $167,743 settlement. The companies also allegedly violated the Textile Act by failing to include mandatory country-of-origin disclosures on their flags, actively depriving consumers of the ability to see where the products were actually made.[1][5]

The third settlement hit Oak Street Manufacturing Company, known as Oak Street Bootmakers. The company allegedly claimed its footwear was 'handcrafted 100%' in the United States and made 'from heel-to-toe, using no pre-assembled components from overseas.'[4][5]

The FTC's investigation revealed that Oak Street utilized factories in the Dominican Republic to produce the upper portions of certain footwear and sourced outsoles from Brazil. The company agreed to a $75,000 settlement to resolve the deceptive marketing allegations.[4][5]

A common trap for manufacturers is confusing the FTC's advertising rules with U.S. Customs and Border Protection (CBP) import standards. CBP may classify a product as U.S.-origin if foreign inputs undergo a 'substantial transformation' domestically. However, the FTC's advertising standard is much stricter, requiring negligible foreign content regardless of how much domestic processing occurs.[6]

Companies relying on global supply chains are not banned from highlighting their domestic workforce; they simply must use qualified claims. Phrases like 'Assembled in USA with imported parts' or 'Made in USA from global materials' are entirely legal, provided they accurately describe the extent of the domestic processing.[3][6]

The FTC's enforcement wave is expanding beyond express claims. In July 2026, the agency issued warning letters to seven additional companies, scrutinizing implied claims where patriotic symbols, flags, or phrases like 'True American Quality' convey a deceptive domestic origin message. As the crackdown continues, consumers can expect the 'Made in USA' stamp to become a much more reliable indicator of a product's true origins.[3][7]