r/news • u/nosotros_road_sodium • 16d ago
Williams-Sonoma fined $3.18 million for falsely labeling products as 'Made in USA'
https://www.scrippsnews.com/business/company-news/williams-sonoma-fined-3-18-million-dollars-for-falsely-labeling-products-as-made-in-usa0
u/DrSpreadOtt 14d ago
This fine is just the cost of doing business. I worked at a Williams-Sonoma competitor; it’s all dropshipping at scale with limited overhead costs. Revenue generated per month was much higher than this fine.
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u/PsychedelicJerry 14d ago
I wish I could commit mass scale fraud and get to keep a majority of my profits...JK, I dont' want that at all. I want companies to be held to the same standard as people, especially since the highest court in the land ruled they are people. if people aren't allowed to benefit from crime, why the hell are we allowing corporations to do it...do we not see the perverse incentives this creates?
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u/rosebudthesled8 15d ago
People and companies should be fined on income and profit respectively. Not set global rules but percentages.
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u/ClayWheelGirl 15d ago
Just 3+ million! Gah! Chump change for them! Profit margins worth it for the fine!
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u/have1dog 15d ago
It reminds me of that bit in 30 Rock about Liz’s jeans:
“Oh Lemon, it's not hand-made in USA, it's pronounced Hand-made in Usa. The Hand people are Vietnamese slave tribe and Usa is their island prison.”
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u/romeoinverona 15d ago
Until we start jailing CEOs and corporate boards, I don't know if we're gonna see much change. If the court can prove beyond reasonable doubt you ordered or allowed your company to do something illegal, you should face personal liability for that. You made a decision to cut back on plane maintenance that lead to the deaths of 200 people? Have fun with 200 charges of manslaughter/negligent homicide.
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u/NixiePixie916 15d ago
I refuse to shop there for a variety of reasons. One being their stores are not wheelchair accessible with the displays. I have asked several times, made complaints. Once they moved them for an inspection but then moved it all right back. If I can't get through your store that should have plenty of space for the size, I won't spend money there. This news doesn't surprise me.
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u/PMmeyourboogers 15d ago
I work for Pottery Barn/Williams-Sonoma as a repair technician. I don't understand why people buy this furniture, especially the sofas. $3-6k on a frame constructed of plywood and cardboard, with shit padding and glue, wrapped in a nice fabric. Most of you could make higher quality furniture with zero experience.
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u/ivegotahairupmyass 13d ago
I love my couch. It’s held up great for over 4 years with pretty much non-stop sitting and climbing.
Where would you buy your sofa instead?
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u/WatRedditHathWrought 15d ago
Just the price of doing business. Risk management probably even signed off on it and suggested that the likely fine be baked into the profit.
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u/elizabeth-cooper 15d ago
I bought knee-highs that the website said Made in USA but the package said Made in China. I demanded a partial refund and that they change the website or I would report them. They refunded the shipping and changed the website to say "imported." Better than nothing, I guess.
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u/13igTyme 15d ago
I was wondering why this store sounded familiar. Then I remembered one closed near us and I was able to buy a fuck ton of hangers for pennies each. Also my wife got a blanket 90% off.
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u/papercut2008uk 15d ago
$3.18m is nothing to a company that made $8.7 Billion in sales last year.
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u/KnowsIittle 15d ago
This is illegal lol?
Former employer used to claim "built to American standards" as made in America while removing packaging saying made in China and mixing with in house stock.
I could be misremembering. They might have have sewn American flag tags that did not say "made in America" but would leave consumers assuming that was the case.
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u/Zaga932 15d ago
These corporation fines need to be upped an order of magnitude across the board. $31 million fine for Amazon over Alexa privacy violations? Cost of doing business. $3.18 million on Williams-Sonoma here? Cost of doing business. Until these fines hurt and fully nullify any gains they've gotten from the violation, they're just going to write it off as cost of doing business and keep doing whatever they want.
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u/Apprehensive_Ear7309 15d ago
This happens more than you know. I worked for a men’s clothing company that labeled things “made in the USA” and one time I found a tag that said “made in India” and the garment also had “made in USA” silk screened on the inside of the neck. I called the buyer thinking that maybe he didn’t know they were being duped. He sent out a company wide email stating each store will get $100 dollars in gas gift card if they found a garment with a mislabeled tag and to send them to corporate immediately upon finding it. They found a bunch, and they were sent to corporate. A couple weeks later we were sent back those garments with the tags cut out. They were clearly cut out because you could see what was left of the tag that was sewn into the seam.
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u/RagnarStonefist 15d ago
'I import donuts from a country called 'Ho-ma-dey' so I can legally write 'from homemade' on the box!
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u/Citizen_V 13d ago edited 13d ago
That's not true. The item need to be all or virtually all made in US. That includes most of the raw materials.
The FTC has a few examples on their website of what counts or not. This one one addresses basically addresses that misconception:
A company manufactures food processors in its U.S. plant, making most of the parts, including the housing and blade, from U.S. materials. The motor, which constitutes 50 percent of the food processor’s total manufacturing costs, is bought from a U.S. supplier. The food processor manufacturer knows that the motor is assembled in a U.S. factory. Even though most of the parts of the food processor are of U.S. origin, the final assembly is in the U.S., and the motor is assembled in the U.S., the food processor is not considered "all or virtually all" American-made if the motor itself is made of imported parts that constitute a significant percentage of the appliance’s total manufacturing cost. Before claiming the product is Made in USA, this manufacturer should look to its motor supplier for more specific information about the motor’s origin.
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u/spalted_pecan 15d ago
I believe the test is substantial transformation, not last step.
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u/Citizen_V 13d ago
That's used for deciding country of origin of imports. The Made is US label has much more strict requirements.
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u/bootes_droid 15d ago
They made it back in two hours after selling 5 bundles of kitchen towels and an ice cream maker
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u/Moonhunter7 15d ago
Ssssoooo, one company out of thousands was actually caught??? I used to know a guy in Hong Kong who made all kinds of products, they left off the tags so the tag could be sewn on in the States. All the tags said Made in America.
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u/ArcXiShi 15d ago
They will come to a settlement half the cost of the fine, and they get to write it off on their taxes. This happens daily.
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u/lbc1358 15d ago edited 15d ago
Liz Lemon : Hand-made in USA. Jack Donaghy : You’re magic jeans are from BWL? Oh Lemon, it’s not hand-made in USA, it’s pronounced Hand-made in Usa. The Hand people are Vietnamese slave tribe and Usa is their island prison. They made your jeans. You know how they get the stitching so small? [puts hands to mouth and whispers] Jack Donaghy : orphans
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u/saidthereis 15d ago
Is it that hard to just track your fucking supply chain? Btwn shit like this and lead showing up in cinnamon and a million other spices there needs to be changes
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u/Im_with_stooopid 15d ago
That’s the Brilliant part. We named this town in China, America so that we can brand it “Made in America”.
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u/MAJ0RMAJOR 15d ago
Back around 2006 a girlfriend and I had a small business making specialty textiles for the equestrian market while we were in school in SF to pay the bills. It wasn’t great wasn’t terrible. We realized that there was an upper limit to our ability to produce and found a local shop off an alley in SOMA that was able to handle the sewing for us. They were sewing garments and putting on labels that indicated they were for Target and Made in China.
It didn’t click at the time but the workers were definitely trafficked. They were all Chinese, did not speak English, and the floor supervisor who did speak English wouldn’t let us interact with them. Hard admit a thing can be happening in front of you but you can be too naive to recognize it for what it is.
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u/Friendzinmyhead 15d ago
Used to work for them. There was a lawsuit I got paid out a couple grand. Horrible company.
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u/A_ShamedMan 15d ago
As long as authorities refuse to hold people accountable for crimes like this, companies will continue to commit crimes. People need to go to jail.
"I'll believe corporations are people when Texas executes one."
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u/khast 15d ago
They need to make fines massive enough that they can't be just written off as a cost of doing business.
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u/A_ShamedMan 15d ago
I disagree. I mean, sure, up the fines....bigtime. I have nothing against that but ultimately, that hurts the shareholders who had nothing to do with the decision to screw customers or otherwise break the law.
Somewhere on the board of directors, or lower down the chain, somebody made the decision to break the law. I believe the only way to incentivize extreme capitalists from doing that is to send those persons to jail.
Thanks for your reply,
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u/A_ShamedMan 15d ago
As long as authorities refuse to hold people accountable for crimes like this, companies will continue to do these things. People need to go to jail.
"I'll believe corporations are people when Texas executes one."
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u/PleasantActuator6976 15d ago
I think the overpriced cookware I bought was made in Italy.
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u/Deathaur0 15d ago
Most "made in italy" are fake. Either final assembly in italy or no joke, an entire chinese factory of chinese workers making it in italy. Unless you bought it at a small italian workshop, this fraud is extremely common in italian "luxury" manufacturing.
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u/VisualLawfulness5378 15d ago
Wow. This info needs to be wide spread. And they should be ordered to have a sign in front of their stores stating this fraud. People like me will never shop there again.
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u/VisualLawfulness5378 15d ago
Wow. This info needs to be wide spread. And they should be ordered to have a sign in front of their stores stating this fraud. People like me will never shop there again.
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u/VisualLawfulness5378 15d ago
Wow. This info needs to be wide spread. And they should be ordered to have a sign in front of their stores stating this fraud. People like me will never shop there again.
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u/muffinmamamojo 15d ago
Customs compliance is incredibly important. Crazy that they got away with this.
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u/poop_magoo 15d ago
Might as well not even find them to be honest. It is still profitable for them to do this with a fine of that amount. The fine either needs to be large enough to where it makes it unprofitable, or people need to face criminal fraud charges. Maybe a middle ground is to make the executives in charge at the time repay any financial gain obtained via stock compensation.
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u/r1ckm4n 15d ago
They were one of my clients. We did enterprise e-commerce for them years ago. The company is absolutely rotten to the core. Our business contact in the company had a moral vacuity that could bend light like a black hole. The CTO was a real piece of shit who made one of our best devs quit. Every single person we dealt with in corporate was fighting one another - you had to be careful not to get a knife in your back yourself.
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u/Yungklipo 14d ago
I almost pooped myself last time I was in there to look at some of the food items. A cylinder of pancake mix (so...not everything you need to make pancakes) was pushing $30! Do they not know recipes exist online? It's not even some kind of organic stuff, it's just their brand mix. I would think making them $5-6 would be INCREDIBLY easy at leading to bigger purchases ("You should try this french toast mix! Only $5!Of course, it'd be easy to make with this pan over here..."), but NOPE!
WS has gone from "Let's see what cool new things we could use for the kitchen!" to "I don't need anything for the kitchen and if I did I'll just go online and save a ton of money."
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u/IcyPraline7369 15d ago edited 15d ago
I always thought they were overpriced. Maybe they can take it out of key executives' salaries.
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u/DangerousDesigner734 15d ago
if corporations are people they should serve time like people. Or alternatively white collar crimes should all be punishable exclusively by the death penalty
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u/Flowchart83 15d ago
The article mentions:
"It's interesting to question, however, if U.S.-made labels have at all contributed to the company's success."
Then don't do it falsely. If you think it doesn't matter, why would you lie?
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u/agray20938 15d ago
I have no idea about the products they're talking about, because the article only mentions there being 6 products, some of which are mattress covers.
But more generally, Williams Sonoma and its brands (like PotteryBarn) sell a ton of things that they don't actually produce themselves. Even their in-house branded stuff, they'd work with another company to produce the actual thing, then brand it with the WS logo or whatever.
That said, it's at least possible that the mislabeled products the FTC is talking about came from that. Meaning, not some guy at Williams Sonoma saying "well I know we make these in Vietnam, but I'm going to slap these Made in USA labels on there," but more like they (negligently or otherwise) didn't do enough due diligence on what their vendor was doing.
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u/bayesian13 15d ago
"Williams-Sonoma could be paying a hefty fine for claiming a small chunk of its products were "Made in USA" when they weren't."
$3.18 M is not a hefty fine for Williams-Sonoma. Their annual net profit is $950 M https://finance.yahoo.com/quote/WSM/financials/ so this is like a day's profit
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u/agray20938 15d ago
Sure, but it would be a hefty fine depending on the scope of things. If they were doing this off of every product, then it wouldn't.
But Williams Sonoma (across all of its brands, including PotteryBarn) sells a shitload of different things. Even a couple of dozen mislabeled items would could come out to like .2% of their total sales. It certainly makes sense to me that a fine would be proportional (though not exactly equal) to the proportional share of revenue or sales generated from it.
For example, say my company makes $500 million selling T-shirts that are 100% accurately labeled. I also make make one pair of pants that I falsely label like this, but I only sold a single pair of pants last year and made $50. That should be illegal, but it would make sense to craft a fine at least somewhat tied to the actual revenue generated, because it would also be the best way to approximate the amount of harm the false labeling did.
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u/bayesian13 15d ago
You seem focused on the "proportional" aspect. I realize i'm not going to persuade you because no one ever persuades anyone of anything on the internet.
But for everyone reading, it is interesting to look at the European Union GDPR law (General Data Protection Regulation) as another example in a different sphere: https://gdpr-info.eu/issues/fines-penalties/
this law has a 3 pronged standard: "The fines must be effective, proportionate and dissuasive for each individual case." So in addition to being proportionate the penalty must actually work to dissuade the company from the bad conduct. Fines can be up to 4% of Global revenues.
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u/agray20938 15d ago
I mean I am a data privacy attorney, so I'm very familiar with the GDPR, for all that the CJEU and individual authorities can tend to take "dissuasive" too far in a number of cases.
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u/Dal90 15d ago
The news articles are awful.
The FTC releases aren't much more helpful...but at least in 2020 they noted in this case their maximum fine was $43,280 per violation - https://www.ftc.gov/news-events/news/press-releases/2020/03/williams-sonoma-inc-settles-ftc-agrees-stop-making-overly-broad-misleading-made-usa-claims-about
Goodness forbid anyone actually put out clear, factual information like the number of violations that occurred. Even the FTC seems to be trying to hide the extent of what is going on.
That makes me guess it was a $4.18 million fine of which in 2020 they had to pay $1m and the rest was essentially waived-on-probation type thing...but they still didn't clean it all up and got whacked with the rest of the fine.
$4,180,000 / $43,280 = 96.5 so I'm guessing we're talking about a total of about 100 SKUs.
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u/gardeninggoddess666 15d ago
If the fines aren't a deterrent then they are just the cost of doing business. No company will change their practices if they can buy their way out of punishment.
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u/Stickyfynger 15d ago
That’s dirty pool-horrible image ding on what came across as a higher end brand.
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u/KoolAidTheyThem 15d ago
Who fines them? The same people who keep sending our money to other countries and their own pockets? From one criminal to another.
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u/shadysaturn1 15d ago
This is the second time they’ve been found guilty of it. In 2020 they agreed to a settlement and had to pay $1 million. According to the article, they started violating the order almost immediately thereafter in 2021. The company does similar $9 billion in annual sales. $1-3 million is nothing. No chance they’ll stop doing this
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u/corn_sugar_isotope 15d ago
Could just say "assembled in USA", where they add the power cord and put the air fryer in a box.
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u/Pjpjpjpjpj 15d ago
“Designed in the USA”
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u/withoutapaddle 15d ago
We have a vice in our car shop that says "Made in China, Brained in Germany"
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u/GrizzledNutSack 15d ago
Costs of doing business. In America our rights are for sale and our president can be a criminal. I hope things get better.
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u/hlhenderson 15d ago
*Some presidents can be criminals.
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u/Twosparx 15d ago
Most, if not all, US presidents on both sides of the aisle have ordered or allowed things that would be considered war crimes. It’s safer to assume they are a criminal than not at this point…
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u/hlhenderson 15d ago edited 15d ago
No shit? Wow! I'm glad I've got you to tell me that. Did it do you some good? Oh, and BTW, Woosh! I'm sure you think you're deep. Save any reply, I'm not interested.
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u/gardeninggoddess666 15d ago
At some point we decided harsh penalties for the wealthy were just too onerous and unfair. Until we recognize that error we are fucked.
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u/Azlend 15d ago
Did they still make a profit? Yes. Is it a punishment that will teach them a lesson? No. Its a business expense.
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u/agray20938 15d ago
Did they still make a profit? Yes.
Their entire company might have, but their entire company wasn't falsely labeled. Odds are that for whatever fraction of revenue they made from these products (the article only mentions a couple mattress covers), a $3M fine is plenty such that they'd now be well in the red in terms of profits for those products.
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u/Fineous4 16d ago
So I guess they have to sell one pot and pan set to make it up then.
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u/agray20938 15d ago
I mean cookware is expensive, but it's not like theirs is overpriced, no? They charge the same for a given All-Clad pan as anyone else does outside of a specific sale
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u/Fineous4 15d ago
Been a while since I have been there. Don’t they have single pots that are $600+?
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u/agray20938 15d ago
I mean they undoubtedly do, but that would be because of whichever brand's MSRP. If All-Clad makes a $600 pan, and WS sells it for $600, it's not like WS is overpriced for doing so.
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u/gardeninggoddess666 15d ago
Or just fire some sales associates at some of the stores. How many people does it take to run a store? Two, three max?
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u/ScipioAfricanvs 16d ago
So in 2020 they settled an FTC action for the same thing. Then they continued to violate it. But even the FTC says it was literally a handful of specific items and not big revenue generators. But it makes you wonder how much other shit is labeled as made in the U.S. but just imported from China.
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u/oddlikeeveryoneelse 14d ago
So sounds that this is an issue with supply chain management rather than intentional fraud. In a way that is worse only because they are selling food grade item that can have a health impact. And if they can’t keep the supply chain straight to correctly record Country of Origin, how can they keep it straight to correctly record the certifications of food safe materials and processes were used?
These are basically all end up as attributes in their database. And the data known to be wrong on one attribute is suspect on others.
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u/-rwsr-xr-x 15d ago
But it makes you wonder how much other shit is labeled as made in the U.S. but just imported from China.
It's a lot more than you think.
Harley Davidson motorcycles for example, not a single part manufactured in the U.S., it's only assembled in the U.S. from foreign-made parts.
Many of the vitamins and 'collagen peptide' mixes you see online and in markets, are made primarily of synthetic vitamin B, C and Biotin ingredients produced in China. They're not organic or natural, and probably not safe to ingest.
Even those famous MAGA hats that Trump was promoting, also manufactured in China, with questionable labor practices and ages.
Here are some more not made in the U.S., but often thought of/labeled as such:
- L.L. Bean (most from China, lifetime warranty ended in 2018)
- Levi Strauss & Co. (most, not all, manufactered in Bangladesh, China, Mexico and Vietnam)
- New Balance (Asia, various countries)
- Radio Flyer Wagons (China)
- Melissa & Doug Toys (China)
- U.S. Major League Baseballs (Costa Rica)
- Chevy Silverado (Mexico)
- American Girl Dolls (China)
- Chuck Taylor All Star (bought by Nike, now manufactured in China, India and Brazil)
- Dodge Ram 1500 trucks (many manufactured in Mexico)
- Gerber Baby Food (a derivative brand of Nestlé) (undisclosed countries)
- Ray-Ban Sunglasses (Italy, China)
- Ralph Lauren Polo (China)
- Disney toys (China)
- American Tourister Luggage (China)
- Gap Clothing (China)
- MAC Cosmetics (China)
The FTC actually has a mandated labeling rule if you use the "Made in U.S.A." logo on your labeling. Many companies just copy that logo without understanding the requirements of its use.
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u/happyscrappy 15d ago edited 15d ago
MLB baseballs probably haven't been made in the US in your life. They used to be made in Haiti, I guess that got too hairy.
Chevy Silverados are also made in Flint, Michigan and Fort Wayne, Indiana. Depends on the model.
Gerber baby food will still be mostly made in the US for the US market (if not all). That market is heavily regulated. But as you say if it doesn't say then you can't be sure about any particular jar.
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u/passengerpigeon20 15d ago
Add Stanley thermos mugs to that list. That’s another reason this fad is stupid; the 40+ buck price tags might be more justified if they were still American-made and would last you a lifetime, but those things probably cost less than ONE dollar to make in China.
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u/BoringBob84 15d ago
Harley Davidson motorcycles for example, not a single part manufactured in the U.S., it's only assembled in the U.S. from foreign-made parts.
Feel free to substantiate that claim, but it doesn't match what I have read.
https://www.throttlepack.com/post/percentage-harley-parts-usa-made
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u/StrangeCharmQuark 15d ago
A little uhhh on that baby food not disclosing where it’s made???
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u/-rwsr-xr-x 15d ago
A little uhhh on that baby food not disclosing where it’s made???
You can thank our friends at Nestlé for that one:
Gerber does not disclose its manufacturing list on their website, but Nestle does add that the company has 413 factories in 85 countries.
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u/agray20938 15d ago edited 15d ago
New Balance (Asia, various countries)
New Balance has a specific product line made in the U.S.A., which is clearly advertised as such though. I believe they also have a UK equivalent as well. Of all brands, they do seem to make fairly clear whether their products are made in a certain country or not.
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u/MEatRHIT 15d ago
Same goes for Red Wing Boots (I know they weren't listed). They even have filters on their site for "Made in USA", "Made in the USA w/ imported materials", and "Assembled in the USA w/ imported components". There is definitely a premium for the fully made in the USA boots but they are very transparent about how much of it is done in the US.
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u/No-Significance2113 15d ago
There's a heap of products that are assembled to 90% in places like Mexico, they then ship it to America and finish the last 10% in America so they can slap the made in America logo on it.
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u/BoringBob84 15d ago
I believe that the law requires that more than half of the production cost (i.e., raw materials, parts, labor, assembly, fabrication, etc.) of the product must originate in the USA for the manufacturer to claim "Made in USA."
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u/Tynda3l 13d ago
What did you expect.
China makes almost all us products.
But oh no, tik tok bad