Made in USA Standard Guidelines For Audio Equipment Manufacturers and Consumers

Understanding Made in USA and Assembled in USA Guidelines

American-made audio equipment has a special place in the global market for high-end components. Audiophiles all over the world search for “American made speakers” or “Made in USA tube amplifiers.” But what does “Made in USA” really mean? When can a manufacturer use the term “Made in USA,” when can they use “Assembled in USA” and when should they not make any claim at all?

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The Short Answer: 

• “Made in USA” – All or virtually all of the value of a component is sourced from the United States.
• For example, a speaker could only have some trivial part sourced offshore, like its binding posts or feet. The FTC holds terms like “Manufactured” or “Built” to the same high standard, but manufacturers often mean that they assemble the product in the US of parts of mixed origin when they used these terms. Be sure to ask.  

 

• “Made in USA of <qualifying factor goes here>” – Made in the USA with more than “negligible” foreign content.
• For example, “Made in USA with “60% U.S. content” “Made in USA of U.S. and imported parts.”

 

• “Assembled in USA” – Principal assembly takes place in the U.S. and the assembly is ‘substantial.’”
• For example, an “Assembled in USA” speaker might come from a speaker manufacturer who imports cabinets from Asia and drivers from Europe, and assembles the speaker in the United States. 

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The Long Answer: The FTC Guidelines

The US Federal Trade Commission (FTC) has specific guidelines for each of these terms. By creating a guideline that is flexible enough to cover all industries and situations, they left some room for confusion or ambiguity. It seems that figuring out which companies make their products in the United States would be easy: if a company has a factory here, and most of the parts they use are made at that factory, or at other US-based suppliers, they probably qualified.

It’s not that easy.

Some companies claim more than they should. Is an amplifier made of all foreign parts and screwed together here “Made in USA”? No. Some companies claim less than they should: one large manufacturer has a factory with 13 workers in southern California, and yet they purposefully avoid making any claims.

Why Care About Made in USA Audio Equipment? 

American Made Audio exists to promote companies that produce high-end audio, home theater or car audio products in the United States. Audiophiles obsess over the finest details of the products that bring them closer to the music: why shouldn’t the source of those products be a part of that? There are good environmental, human rights and quality reasons why people buy American products.

The “Made in USA” standard is a difficult one to achieve. True “Made in USA” audio products are rare, sometimes for good reasons. In some cases, the best quality parts are made offshore, so companies source what they think is best – and there is room for companies to make American country of origin claims even if they do.

International trade is part of a healthy global economy, creating a silo is not a goal of this site. Rather, it is to help consumers and manufacturers gain a better understanding of how the products we love came into being. Bringing clarity to a topic that is murky in the industry will help both manufacturers and consumers.

FTC Made in USA Standard and Guidelines

First, let’s look at the types of claims that the FTC allows about products that are made or assembled in the USA. These guidelines apply only to products sold in the United States, and do not apply to products designed for export. For products that will be exclusively exported, the FTC advises companies to comply with the rules for the export country.

The FTC requires that country of origin be disclosed only for automobiles, textiles, wool and fur. All other product categories, including audio and video products, are exempt: Manufacturers don’t have to make any claims.

“There’s no law that requires most other products sold in the U.S. to be marked or labeled ‘Made in USA’ or have any other disclosure about their amount of U.S. content,” the FTC states. “However, manufacturers and marketers who choose to make claims about the amount of U.S. content in their products must comply with the FTC’s ‘Made in USA’ policy.'”

The Five Types of “Made in USA” Claims

There are good reasons why a company might want to market its products as American made. If so, there are five types of claims that the FTC recognizes:

1. Made in USA (Expressed or Implied)
2. Made in USA (Qualified)
3. Assembled in USA (Unqualified)
4. U.S. origin claims for specific processes or parts
5. Comparative Claims

The FTC considers “Manufactured in the USA” to mean the same as “Made in USA” for its purposes. Many audio companies currently use this term, often with products that clearly have parts that are imported. When we look at the requirements for “Made in the USA”, it is clear that not all of these claims are accurate.

If a company does not use one of these recognized claims, the options are:

1. To state the country of origin
2. To state “Imported”
3. To make no claims about the country of origin.

Let’s look at each type of claim individually:

Made in USA (Expressed)

Examples of Expressed claims include: “Made in USA”, “Our products are American-made”, “USA”

For a product to qualify for a claim of “Made in USA” there are three basic requirements:

1. All or virtually all of the components must be made in the USA (i.e., no more than a “negligible amount” of foreign content)

2. The last significant manufacturing or processing must have been done in the U.S. (i.e., the product must have been last “substantially transformed” in the U.S., which means that the article that emerges from the manufacturing process in the U.S. has a name, character or use that differs from the original material subjected to the process);

3. The article must not have foreign components that consumers reasonably would view as significant to the final product.

For example, the following products could be called “Made in USA”:

• A speaker manufacturer makes or sources drivers, cabinets, wiring and crossovers from the United States. If the binding posts, for example, were a negligible amount of the value of the speaker, they could be foreign sourced.
• A cable manufacturer sources virtually all of their components from the US – their conductor, dielectric, jacket and terminations from the United States. If the terminations, for example, were a negligible amount of the value of the cable, they could be foreign sourced.
• An amplifier manufacturer sources virtually all items in the US. If the power button, for exampme, were a negligible amount of the value of the amp, it could be foreign sourced.

Made in USA (Implied)

The manufacturing requirements are identical to expressed claims. All or virtually all of the value of the product must come from the United States. This is to prevent companies from implying something that is not true and fooling customers into thinking that the products are indeed “Made in USA.” To determine if a company has made an implied claim, the FTC “focuses on the overall impression of the advertising, label, or promotional material. Depending on the context, U.S. symbols or geographic references (for example, U.S. flags, outlines of U.S. maps, or references to U.S. locations of headquarters or factories) may convey a claim of U.S. origin either by themselves, or in conjunction with other phrases or images.”

Made in USA Qualified Claims

This claim lets companies say that the product is made in the USA, but with more than “negligible” foreign content. The product must undergo a “substantial transformation,” and not simply be a “screwdriver assembly.”

The FTC gives the following examples of qualified Made in USA claims: “60% U.S. content.” “Made in USA of U.S. and imported parts.” “Couch assembled in USA from Italian Leather and Mexican Frame.”

For some types of audio products, this may be the ideal claim. For example, many speaker manufacturers use drivers sourced from SEAS or Scanspeak in Europe, and wooden cabinets sourced from Asia. In this case, a claim of “Made in USA” would not be permitted because more than a negligible portion of the value of the product is imported. However, a claim of “Made in USA of US and imported parts” may be right, if the assembly involves more than a simple screwdriver.

Assembled in USA Unqualified Claims

When “principal assembly takes place in the U.S. and the assembly is ‘substantial’.”This differs from a qualified Made in USA claim in that the manufacturer does not need to specify the percentage or parts as they do in the qualified claim.

A product that includes foreign components may be called “Assembled in USA” without qualification when its principal assembly takes place in the U.S. and the assembly is substantial. For the “assembly” claim to be valid, the product’s last “substantial transformation” also should have occurred in the U.S. That’s why a “screwdriver” assembly in the U.S. of foreign components into a final product at the end of the manufacturing process doesn’t usually qualify for the “Assembled in USA” claim.

• A speaker manufacturer constructs a speaker through many manufacturing steps, perhaps gluing, mounting, soldering, components using a US-made cabinet and foreign drivers.
• A cable manufacturer might source raw wire overseas, but twist it, add dielectric, and terminate it in the US with US-made parts.
• An electronics manufacturer might assemble a foreign circuit board into a US-made case with US-made power supply.
• Note: “Screwdriver” assembly does not qualify for “Assembled in USA” There must be a substantial transformation of the product during assembly, more than could be achieved by a hobbyist who purchased a kit.

U.S. origin claims for specific processes or parts

The FTC permits companies to make claims for specific parts used, or for elements of the final product. For example, “Assembled in Mexico with 60% US-made parts”, “US-made cabinet”, or even “Packaging made in USA.” The Made in USA standard applies to these parts as it would to a complete product.

Comparative USA Country of Origin Claims

The FTC example is “We use more U.S. content than any other cellular phone manufacturer.” While there may be specific instances where this is useful, it seems to require knowing the supply chain of all of your competitors.

Caveat Emptor

If you are an audiophile, perhaps this will help you better understand the issues around “Made in USA” claims, and help you ask questions from the companies you patronize.

If you are a manufacturer, note that this article is not legal advice and you should consult your attorney before making any claims (and your doctor before starting any physical exercise routine).