Walmart’s ‘Made in the USA’ Claims Under Fire

Walmart’s ‘Made in the USA’ Claims Under Fire

July 08, 2016 | Made In The U.S.A.

"Made in the USA" is an important branding technique used by Walmart to appeal to its American customers. But in the modern economic environment, some are wondering what "Made in the USA" really means? Must it be 100% made in the country - what if parts are assembled elsewhere? Learn why Walmart's "Made in the USA" claims are coming under fire.

What Does "Made In USA" Mean?

Bentonville, Arkansas corporation Wal-Mart is known for its "low prices." Their commercials show employees continually reducing prices. "Save Money, Live Better" is the Walmart slogan.

Since 2000, the United States has lost about 5 million manufacturing jobs. Whether you look at certain industries (such as televisions where there are no major American manufacturers) or Detroit automobile manufacturers, it is clear that many jobs have gone overseas due to lower wages and fewer regulations. Wal-Mart decided to support its American roots by creating its "Made in USA" campaign in 2013.

Walmart's "Made in USA" Campaign Goals

By 2023, Walmart hopes to spend $250 billion on "American-made products." The hope is that the Walmart initiative will create "1 million new jobs with 250,000 in direct manufacturing and 750,000 in support and services." This manufacturing job growth would reinvigorate the nation in all ways, shapes and forms.

The multinational corporation is still headquartered in Arkansas with 5,229 stores in the United States. Worldwide, Walmart had 11,528 stores in 2016. Thus, the U.S. is by far the largest market.

How Does Walmart Encourage U.S. Made Products?

Because of Walmart's influence, their purchasing a product from a manufacture can be enormous. By establishing its "Made in USA" branding, Walmart has allocated a certain amount of money each year to homegrown companies. For a new startup, becoming a Walmart supplier can help can help them stay in business or make them profitable immediately.

Every year, Walmart has a "U.S. Manufacturing Summit" where the company shares insights on how companies can qualify for their American-made designation. The "Made in USA" category required that products be assembled domestically and made of component parts manufactured in the United States. So, what is the problem? Why did ' "TruthInAdvertising.org" (TINA) allege that more than 100 products listed on "Walmart.com" were "erroneously labeled as "Made in the USA," saying they were either partially or completely produced overseas?"

The Federal Trade Commission (FTC) investigated and permitted Walmart.com to simply modify its website to remain in compliance. The FTC definition of "Made in the USA" is based on "all" or "virtually all" of the contents being made in the USA. TINA spokeswoman Shana Mueller said "In all events, there's no question that labeling a product as made in the U.S. when it contains significant foreign content or is wholly made elsewhere is a violation of FTC law[.]" Walmart stated that TINA's claims are "not new." Walmart will continue to work towards improving "transparency and authenticity." Should Walmart be blamed?

America was founded on Capitalism.

Under the capitalistic system, market forces rule. Walmart's primary brand differentiation is price. Thus, all its suppliers must offer the most affordable products to qualify - even the "Made in USA" suppliers.

In some respects, Walmart is playing a risky game. American workers want more "Made in USA" products and consumers want cheaper goods. The majority of Walmart stores are actually overseas in 2016 and the company is starting to shut some stores. Its competitor, Target, closed all of its stores in Canada.

What Will America Do?

Presidential candidate Ross Perot warned Americans that the "sucking sound they heard would be the lost jobs going to Mexico" if they supported NAFTA. Was he correct? Yes.

It has become very difficult for any retailer to not offer China-made products. Many American firms have moved to Asia. As mentioned earlier, no American television manufacturers exist in 2016.

Walmart is in the public spotlight, so it gets the blame. Until Americans define "Made in the USA," like Europeans with "Value Added" designations, there will still be arguments about its authenticity. Walmart is trying and for that - "Walmart should be commended for trying to save jobs with its 'Made in USA' campaign."