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What Does ‘Made in the U.S.A.’ Really Mean?

You'd be surprised to learn the complicated guidelines around fashion’s most-hyped label.
Photo: Shinola

Photo: Shinola

From June 25 to July 4, we'll be examining — and at times, celebrating — all things American made, from the state of U.S. apparel manufacturing to American-born models on the rise. You can follow all of our coverage here.

Fifteen years ago, designer Natalie Chanin left New York City and moved back to her hometown of Florence, Alabama, where she started what is now called Alabama Chanin, a line of made-to-order dresses and easy jersey basics. Chanin made a name for herself in the fashion world by producing locally. Her one-of-a-kind gowns were hand-stitched by local seamstresses. While the brand has evolved along the way, Alabama Chanin has remained a beacon for labels that want to produce their clothes in a thoughtful, ethical way.

Chanin was trumpeting the “Made in the U.S.A.” label long before it was cool again, and her website offers a detailed look at her supply chain, from the organic cotton seeds harvested in Texas to the fabric that is hand or machine sewn in her Florence factory. However, there is one element to the line that cannot be produced Stateside: The fine yarns required to make lightweight cotton jersey. Chanin has not been able to find machines in the U.S. that can spin that sort of yarn, so she must import it from Turkey. “It’s an American tragedy,” Chanin says.

While the yarn is from Turkey, it’s knit here, so Chanin is still permitted by the Federal Trade Commission to label any garment made of the fiber with “Made in the U.S.A.” That’s because of the Code of Federal Regulations’ Title 16, Part 303.33, a part of the the Textile Fiber Rules. A brand must look “one step back” to determine the country of origin. Because the yarn is knit and dyed in the U.S., not just cut and sewn, it is considered a U.S. garment.

However, if the yarn was knit abroad, but cut and sewn here, the FTC would say that the garment should not carry the “Made in the U.S.A.” tag. It’s an issue that more and more brands that pride themselves on manufacturing in the U.S. are facing. If you’re spending the extra cash to manufacture your clothes here, it’s something you’d like to show off. But technically, if every little bit isn’t done here, you can’t. Companies that violate this rule may be contacted by the FTC.

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It’s even more of a challenge for makers of leather goods, which do not fall under the Textile Fiber Rules. Instead, things like handbags and wallets must comply with the general Made in U.S.A. Standard, which requires that "all or virtually all" of the product be made in the U.S. For leather goods, there is no “one step back” addendum. If the rawhide is not from an animal that was raised in the U.S., the resulting item probably should not be labeled as Made in the U.S.A. The FTC works on a case-by-case basis to determine whether or not the labeling is "deceptive." 

The problem is that many brands are unaware of, or at least unclear about, the FTC’s rules, and proudly boast that their goods are made in the U.S., emblazoning the label on their items, even when parts of those items are imported. One leather goods maker with whom I spoke was entirely transparent about the fact that at least half of its hides came from Brazil, even though every bag is imprinted with “Made in the U.S.A.” “From the tanning to the polishing, we construct every part of the bag here,” says the designer. Unfortunately, that matters little to the FTC.

Julia Ensor, an attorney with the Federal Trade Commission, and FTC investigator Steve Ecklund say that the process for dealing with a company misusing the “Made in the U.S.A.” tag varies. “If we receive information that a company is making deceptive ‘Made in the U.S.A.’ claims, and doesn’t fully understand the policy, we will provide some informal staff feedback,” says Ensor. The hope is that the company will then correct its mislabeling. If not, the FTC could pursue various legal actions. “If a company is actively trying to deceive consumers or is not responsive to our attempts at working in a more counseling way, then we will recommend that the commission proceed to litigation, and the case could go to federal court.”

According to attorney Brian Igel, it rarely goes that far. “Like many other state and federal agencies, the FTC does not have the manpower to act as a policing agency,” says Igel, whose firm Bellizio & Igel advises entrepreneurs in the fashion, media and tech spaces. “In my experience, they are usually reactive, as opposed to proactive. But these rules are most certainly enforced.”

The FTC’s rules are strict, and it’s easy to understand why a young brand might be ignorant to them or in some cases, disagree with them. Manufacturing — and creating jobs — in the U.S. should be a positive, and if you can’t shout it from the rooftops it takes away from the significance. A Swiss watch, for instance, can be called Swiss if only 60 percent of the product’s manufacturing costs have been generated in Switzerland. Yet an iPhone says "Made in China" even though its most valuable parts were not actually made in China. Even if a group of American manufacturers were to lobby the FTC to make changes, where should the line be drawn?

The descriptions on Belgian designer Bruno Pieters’s Honest By website — which includes the name and location of the factory from which every part of the item was produced, as well as the origin of the raw material — may seem excessive, but in reality it might be exactly what we need. What the FTC does allow for is a qualifier. Something like, “Made in the U.S.A. of imported hides” is okay. For now, the onus is on the brands to make sure they’re being as transparent with their customers as they can.