With America250 celebrations and the 2026 World Cup only a few months away, suppliers and distributors are increasingly focused on Made-in-USA products. But not all domestic products are created equally, and some vendors are making fraudulent claims saying products were made in America when that’s not fully the case.

A new executive order aims to change that. Last week, President Trump issued an order that would hold advertisers accountable for making false claims around Made-in-USA labeling.

In 2021, the Federal Trade Commission (FTC) issued its Made-in-USA labeling rule, thereby prohibiting the use of Made-in-USA or Made-in-America labeling on products that do not meet the standard.

“Marketers need to be ready to show all or virtually all parts and processes are of U.S. origin, all the way back to raw materials,” Julia Solomon Ensor, a counsel of the Advertising & Media Industry Group at law firm Reed Smith told Counselor.

In other words, the final assembly, all significant processing and all components or ingredients must originate in the U.S. to meet this standard.

Companies that fail to comply with the FTC’s mandate could be liable for a significant penalty, added Ensor, who spent 15 years as the Made-in-USA program manager at the FTC before joining Reed Smith.

“You could be looking at more than $50,000 per violation per day, which really stacks up quickly,” she said.

The new executive order reinforces the FTC’s policy, and noted that the FTC may consult with other departments and agencies with specific product expertise. It also directs the FTC to prioritize the enforcement of the Made-in-USA labeling rule against deceptive claims, and consider new or additional rules that address online marketplaces that do not verify vendors’ country of origin.

The order also directs agencies overseeing government acquisition contracts to review and verify any claims under The Buy American Act (BAA). The BAA applies to goods purchased directly by the federal government and qualifies a product as domestic if:

1.) the end-product is manufactured in the U.S.

2.) the cost of domestic components exceeds a specified percentage of the cost of all components.

But BAA regulations are less stringent than the FTC’s, which could result in a potential compliance disconnect. A product may comply with the BAA standard but fail to meet the FTC rule.

In particular, the executive order could significantly impact suppliers that sell to government agencies, such as the National Park Service or the U.S. military. Suppliers’ failure to comply with federal regulations could have a domino effect on distributors, who would face potential exposure if they mention a false origin claim in their catalogs, or fail to correct fraudulent claims or misleading language from the suppliers they work with.

To protect themselves from potential exposure, promo companies should begin documenting their supply chains and replace ambiguous phrases with claims that can be supported. For instance, a supplier that did not source all or virtually all parts in the U.S. might change their phrasing from “Made in USA” to “Assembled in USA” or “Decorated in USA.” According to the FTC, companies must review their claims on an ongoing basis to ensure consistency and accuracy.

Ensor added that the executive order does not change any of the rules the FTC currently has in place, but rather reinforces them.

“This EO imposes no new legal requirements, nor does it imply that there will be any change in the standard for making a ‘Made in USA’ claim, for purposes of general advertising or federal acquisitions,” she says. “All it does is encourage relevant agencies to enforce the laws and rules that are on the books, and to consider rulemaking in a few specific contexts. Businesses that follow the law have nothing to worry about.”

Additional information on the FTC’s qualified Made-in-USA standard can be found on its website here.