The University of Texas at Austin
  • Want to Buy American? Look Beyond the Label

    By Steve Brooks, Texas Enterprise
    Published: July 3, 2013

    American Flag barcode

    • For a product to qualify for “Made in USA” labeling, most of its parts and materials must have been produced domestically
    • However, the Federal Trade Commission relies on an honor system, investigating only if someone complains
    • Crowdsourced projects provide information about the global origins of product components

    Nothing says red, white, and blue like where you spend your green.

    As Independence Day rolls around, you might want to show your patriotism by going shopping. You’re incensed by reports of Chinese-made U.S. flags and Olympic uniforms. You want to support American jobs. Just look for a label like “Made in USA.” Right?

    It’s not so simple, according to supply chain expert Michael Hasler, director of the Master of Science in Business Analytics program at the McCombs School of Business. In this age of globalization, he says, “The label does not tell the whole story, not by a long shot. There are few consumer items you can purchase in the U.S. that don’t have some level of international content.”

    He points to a Dell laptop. It’s a familiar U.S. brand name, and it’s designed in the Austin area. “If I have a choice, I would buy a Dell,” he says, “because I have friends and colleagues who work for Dell.”

    But he doesn’t pretend he’s buying American. “Virtually the entire manufacturing value stream is overseas,” he says. “If you compare it to a Toshiba, they’re using virtually the same suppliers. It just so happens the other product is designed and managed in Japan.”

    So what’s a patriotic shopper to do? First, says Hasler, “people need to realize that everything has a global component, and embrace it.”

    But there are ways to find products with higher percentages of domestic content:

    Buying American What the Labels Mean graphic

    Click here for a larger image.

    Learn about labels. The Federal Trade Commission publishes a 44-page rulebook for products that claim to be U.S. made. The strictest guidelines govern stickers like “Made in USA” or “Made in America.” To qualify for those designations, most of the product’s parts and materials, as well as the factory that puts them together, must be domestic.

    The catch is that it’s mostly an honor system. The FTC can fine violators as much as $16,000 per mislabeled item. But it only investigates if someone complains — usually a competing company.

    The FTC encourages a variety of other phrases that make less sweeping claims. “Assembled in USA” means most parts probably came from overseas.

    “Don’t assume that just because something is assembled in the U.S., that’s where the bulk of the value is being created,” notes Hasler. “Maybe you’re adding 10 percent of the value in the U.S., but 90 percent of the value is made elsewhere.”

    The trickiest labels to decipher are those that use flags or words like “American.” They’re supposed to list the actual countries of origin, but to find the list, you might need to don reading glasses.

    Look beyond the labels. Like consumers who want to preserve rainforests, those who want to preserve American jobs can research brands and products online.

    Of many websites that offer such background, Hasler suggests It’s a crowdsourced directory of supply chains, using colorful maps to trace the components of an iPhone as they move around the globe. You can confirm that a manufacturer like American Apparel actually lives up to its name.

    “If you’ve done the research, you have an opportunity to have an impact with your purchasing,” says Hasler.

    Over time, you should find increasing options to do so, Hasler adds. More American manufacturers are onshoring some of their supplies — moving their operations back to the U.S. — as they find Asian firms sometimes carry hidden costs.

    “If you discover a quality problem, you might have to wait three months before you can get quality replacements,” he explains. “Or you might have to air-ship it. In the end, it costs you more than if the shop was up the street in Round Rock.”

    A version of this story originally appeared on Texas Enterprise.

    • Quote 2
      Jessica said on July 25, 2013 at 10:16 a.m.
      Thanks for sharing, here in France, there's some made in France issue too with the "Made in".. Great exemple is about Apple/Google remanufacturing products back to America ! It's necessary for companies to bring back some factories in U.S!
    • Quote 2
      Mak said on July 21, 2013 at 10:40 a.m.
      Nice article to get idea what these labels mean
    • Quote 2
      Zac said on July 18, 2013 at 8:58 a.m.
      Great Article. Never really thought about it before. Always had the basic impression that if it had a Made in America stamp on it, the item was from here. Didn't know that there are various types of Made in America stamps. Thanks for the insight!
    • Quote 2
      Justin said on July 15, 2013 at 5:01 p.m.
      I genuinely thought made in america was just that but it seems a lot of overseas products and off-brands have american flags and things in them. Subliminal advertising at its finest. Also the fine print is of such a small font you usually do not even notice it.
    • Quote 2
      BuyDirectUSA said on July 10, 2013 at 11:55 a.m.
      It is more important than ever to look closely at the labels to help create jobs for Americans. While it is a challenge to find 100% Made in USA, it can be done if they are made in California, thanks to strict rules there. However, as long as those that product Made in USA products that abide by the FTC rules and are American Owned companies. Most consumers who support Made in USA would be happy.
    • Quote 2
      Wichita Advertising said on July 9, 2013 at 10:52 a.m.
      Good stuff Steve! This is a great resource for learning about these labels. I had no clue about the 44 page rulebook for US made products. Shared this on our Facebook Page for Copp Media.
    • Quote 2
      Symmetrize said on July 6, 2013 at 9:31 a.m.
      Great article and very resourceful on products being manufactured/assembled in the U.S.
    • Quote 2
      Peluche said on July 6, 2013 at 4:34 a.m.
      Your article calls out to question me... I am French and at our home, there is since little time a wave of economic chauvinism and even few politicians make the advertising for our made in France. Regrettably the economic crisis incites rather people to look for lowest prices rather than to try to support the state economy. The wildest opponents of this type of consumption deduce that at the time of the globalization it is impossible even unhealthy to be engaged in the protectionism.
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