To claim a product is Made in USA, the Federal Trade Commission (FTC) provides guidance. If all the components where manufactured in the United States and all the processing occurred in the United States, then the finished good is deemed Made in USA. For electronics manufacturing, this is difficult to achieve because not all components are made in the United States. Therefore, the FTC provides a fallback position for making a "unqualified claim" that the product is US made.
A product will be considered substantially all made in the United States if:
(Note: "substantial transformation" is a U.S. Customs Service term that refers to a manufacturing process that results in a new and different article of commerce, having a new name, character and use that is different from that which existed prior to the processing)
At the Downers Grove plant, a modern surface mount technology (SMT) process line pastes solder onto blank printed circuit boards (PCBs), places active and passive components onto the pasted PCBs, and then reflows the assembled PCBs through temperature-controlled ovens to create printed circuit board assemblies (PCBAs). The PCBAs are then tested and packaged as adapters, or assembled into metal enclosures, tested and packaged as finished devices for storage into a warehouse. Thus, a substantial transformation has occurred.
To determine manufacturing cost, a conventional cost-of-goods-sold (COGS) calculation is made which includes component cost, direct labor cost, indirect labor and overhead costs. Other than possibly the components, all other costs represent US costs. From a costed bill-of-material (BOM), the US cost content can be determined and if the 75% threshold is met, the product is deemed Made in USA and the country of origin (CoO) becomes the United States. These products will be so marked in our collateral.
If the finished good was substantially transformed but does not meet the 75% threshold, it is still possible to provide a "qualified claim" such as Made in USA with US content of 50%.
For our customers in Canada and Mexico who want to purchase products from the company that comply with the NAFTA rules, our "Made in the USA" products are NAFTA compliant. Please request "Made in the USA" when purchasing a product. The subsequent invoice will indicate NAFTA compliance.