In an era where tariffs are reshaping global supply chains, many American consumers are increasingly scrutinizing packaging for the "Made in USA" label. This is driven not only by a desire to avoid import taxes but also by a growing inclination to support domestic businesses. However, the realities surrounding the so-called country-of-origin label are more intricate than they might first appear, often reflecting only a fraction of the entire story.

The label "Made in USA" is not merely a marketing gimmick; it represents a stringent set of criteria. According to the Federal Trade Commission (FTC), for a product to proudly display this label, its final assembly or processing must occur in the United States, and a significant portion of its manufacturing costs must be incurred domestically. This means that while most of the components and the assembly labor need to be sourced from the U.S., there is still some flexibility involving foreign materials.

Marcus Eeman, a senior manager of customs at Flexport, emphasizes the high standards associated with the "Made in USA" label. He notes that it is quite rare to see products clearly labeled as "Made in America"; instead, consumers might see labels like "Assembled in America," which often include foreign components. Eeman elaborates, saying, "You probably will never see a car that says 'Made in America,' but you will see it that says 'Assembled in America,' probably with some foreign components as well." This distinction highlights the complex interplay between domestic assembly and foreign parts.

Interestingly, the allowance for foreign components under the "Made in USA" label is steeped in legal precedents. A notable case from 1908 involving Anheuser-Busch revolved around the use of cork sourced from Spain for beer bottles. The Supreme Court ruled that the cork did not significantly alter the product, as it did not change the beer's name or character. This historical case has influenced how products today are evaluated under the "substantial transformation" test, which can determine whether a product retains its original country of origin based on its processing.

Eeman further elucidates how the concept of substantial transformation can lead to perplexing decisions. For example, he cites a case in which a bulk block of lipstick material was sent from Italy to China for processing. Although the lipstick was shaped, melted, and packaged in China, U.S. Customs and Border Protection (CBP) ruled that Italy remained the country of origin. This ruling underscores the complexities inherent in determining the geographic roots of many products.

The U.S. Department of Commerce's International Trade Administration offers additional clarity on this matter. They explain that while ingredients such as sugar, flour, and nuts can be imported, they can still yield a product labeled "Made in USA" once they undergo significant processing domestically, such as being baked into cookies.

However, it is crucial to recognize that bilateral trade agreements can complicate these labeling rules. Take for instance the United States-Mexico-Canada Agreement (USMCA); under this agreement, there are exemptions for certain imported commercial products valued under $2,500, which do not require strict country of origin labeling.

Another label that often confuses consumers is "Assembled in USA." According to the FTC, a product can be labeled as such if its principal assembly occurs in the U.S. and the assembly process is deemed substantial. However, not every form of assembly qualifies. The FTC clarifies that a mere "screwdriver operation"which involves simply putting together parts without significant modificationdoes not meet the criteria for this label. For instance, if a company were to import components such as a motherboard and hard drive and merely assemble them into a computer in the U.S., the label should accurately state "Made in U.S. from Imported Parts."

The situation becomes even more convoluted with respect to food labeling, specifically relating to pork and beef products. In 2015, Mexico and Canada successfully challenged U.S. country of origin labeling (COOL) requirements concerning these meats at the World Trade Organization (WTO). The WTO determined that the U.S. rules unfairly disadvantaged foreign producers, prompting Congress to repeal the COOL requirements for certain meat products.

Thomas Gremillion, director of food policy at the Consumer Federation of America, points out the implications of this change. He explains, "Beef and pork, which were once required to be labeled, now dont have any country of origin labeling requirements. You can take a cow that spends its entire life in Mexico ship it back across the border, slaughter it the same day, and call it a 'Ground beef product of the USA.'" This loophole illustrates the complexities and potential confusion surrounding origin labeling in the food industry.

Despite these challenges, experts like Pam Lewison, agriculture research director at the Washington Policy Center, acknowledge that a significant portion of U.S. meat is indeed produced domestically. Nevertheless, she warns that for other food items, country of origin labeling remains a complicated terrain. Lewison advises consumers, stating, "Ideally, you want to see a label that says the product was made, produced, and sourced from the United States." She adds a note of caution, particularly for seasonal produce: "If you're buying asparagus in December, you shouldn't fool yourself about where it's coming from it's not coming from here."