New Balance sidesteps FTC ad rules

70% is enough for me to buy their shoes over a pair of Nikes.

I can live with 70%.

Wow, how do they get away with that?

Interesting how they word the 70% threshold, on purpose, I'm sure. They say 70% of the "value" comes from the US. So, they could allocate s ton to intellectual property, research and development, and management in the US and very little to the actual manufacturing and materials, creating a shoe that is entirely manufactured in a foreign country, yet fitting their "made in USA" definition. This is why I think the all or virtually all standard is better. The people this really hurts are smaller companies who sell products that are entirely manufactured in the US- those companies have to pay higher labor costs, etc, yet rely on the "Made in the USA" cachet as an extra incentive to buy their product. This reminds me of Apple (and Nike) getting on its environmental high horse to push a carbon tax because they would gain a huge competitive advantage as they dont manufacture in the US.

How do they define value? I wouldn't be surprised if you could do 90% of the manufacturing in China for 30% of the cost of the entire shoe. Outrageous

One of the few apparel companies that's still trying to keep jobs in the US. 70% of the content made in the US is good enough for me. I'd imagine it's very difficult to source 100% of your material domestically, so I'll give them a pass on this one. All my running shoes are New Balance, including 2 "Made in USA" pairs, one of which was probably 100% made in the USA (from way back when).

mark it 8 is right in wonderwing what they include in the 70%. Final assembly, production of some of the components (laces, soles) and design of the shoes?

This is a very complex issue. We run across this all the time. Frankly, particularly for a smaller company, it's almost impossible to audit all this and even know where your vendors are making stuff. If you are buying printed literature that goes with your product, where were the paper and ink manufactured? Good luck even finding a ball bearing that's not made in India, Brazil, Argentina. And if you do, where were the seals on that bearing made? Maybe you could ask your distributor to ask the manufacturer, who might not even tell you then, because they cycle between plants or sub-vendors on the fly. I'm not really taking a stand here - it seems odd to me the FTC hasn't fined them for this, but the issues are not all that clear or straightforward.

This just seems too vague to me. I know it is extremely difficult to trace and control the provenance of every component, but from reading their statement, I kind of suspect the costs break down something along these lines (this is purely hypothetical):

Shoe- $10 cost to NB.
Cost Breakdown:
$2 - Research and Development in US
$2 - Intellectual Property, Legal, etc in US
$2 - Marketing/Sales in US
$1 - Management/ other workforce in US
$3 - Manufacturing/ materials in China

When I think about "Made in USA", I tend to think about manufacturing/assembly and other blue collar jobs, and I suspect most people do. The costs associated with the other components provide income to a (relatively) few professionals, rather than providing accessible bread and butter jobs to the (relatively) many. I admit that I dont know the real cost breakdowns of NB shoes, but it seems to me that the need for a vague qualifying statement means they are playing shenanigans with the "Made in USA" label. I think Douglas makes a good point that it is difficult to know the exact provenance of any manufactured item, but I think that is the reason for the "all or substantially all" threshold- if you make a good faith effort to manufacture the widget in the US, the fact that some components of that widget may have a foreign source wont bar you as long as it is very minor in comparison to the whole.

I thought NB is pretty up front about this.


It seems to me that the Made or Assembled in America products are, at the very least, assembled in the US. They use domestic and imported components. Where the value of the domestic components is >70%, then the product is labeled Made in America; and conversely, where the value is <70%, it's labeled Assembled in America.

I don't know where else you can get a clearer product description than that. Having researched into the areas of product labeling, based on WTO rules, NAFTA rules, and various trade agreements, it's practically impossible to find a mass-marketed product that is 100%, unadulterated, domestic. We're not talking about a Florida-grown orange here (even then, how can you be certain that some of the inputs that go into growing that orange didn't come from overseas? China produces a shitload of pesticides, herbicides, etc.)

^^^^ The "Made in the USA" label is what I am referring to. Sorry if I did not make this clear. I thought I conceded that it is extremely difficult to trace the provenance of a product and where to draw the line (as you highlight in your oranges example) can be difficult. If you think the term "value" gives you a clear indication and reflection of the product, then ok, but I think that when most people see the label "Made in the USA" they 1) think the product is manufactured in the USA due to the popular notion of the word "made" 2) dont really bother to read the qualifying statement very closely and 3) dont think about how the definition of "value" can be manipulated to qualify under the statement. I am just pointing out that there very well may be (and most likely is) a significant discrepancy between what people think that label means and what it actually means.

depends on what the definition of "is" is