On September 1, California enacted legislation making substantial changes to its "Made in America" laws. As reported in the July 2015 Trade & Manufacturing Alert, California had previously stood alone among U.S. states in requiring that products be 100 percent comprised of U.S. components in order to be labeled as "Made in America." California's amended legislation will now permit products to receive the "Made in America" label if: 1) foreign components do not make up more than 5 percent of the final wholesale value of the product, or 2) foreign parts do not make up more than 10 percent of the final wholesale value and the manufacturer makes a special showing that the foreign components are not available in the United States.
This move by California follows months of friction over its previous 100 percent rule. In contrast to the former California law, the Federal Trade Commission's (FTC) labeling standard requires that "all or virtually all" of a product be made in the United States. Nevertheless, in May, a federal judge in California allowed a challenge against Citizens of Humanity Jeans to progress, finding that the California law was not preempted by the less stringent FTC standard. Then in June, a group of Senators introduced legislation clarifying that federal "Made in America" standards supersede individual state requirements.
The National Law Review reports that California's amendment has been met with "[a]n audible sigh of relief from domestic manufacturers everywhere," and will alleviate burdensome requirements to "maintain multiple label inventories and juggle competing domestic and foreign country of origin marking requirements."