“Made in America” Drone Labels Under Scrutiny by the FTC

How many of the claims “Made in the U.S.A.” are really legitimate?  According to the U.S. Federal Trade Commission (FTC), many companies based in the U.S. with manufacturing and assembly facilities are allowing a large proportion of parts to be globally sourced.  The FTC is buckling down to enforce and regulate the latest “Made in America” labeling rule, and drone manufacturers are on the commission’s radar; those businesses could be significantly impacted.  All manufacturing, including the drone industry, is required to uphold a high level of transparency about their manufacturing processes.

Manufacturing and assembly facilities can no longer claim their products are “Made in the U.S.” if more than the allowed proportion of parts are globally sourced.  The FTC ruling specifies that final assembly or processing of the product must occur in the United States.  The label ruling also states that virtually all ingredients or components of the product must be made or sourced in the U.S. 

“Virtually all” parts could be a difficult problem for drone manufacturers, because cameras, plastic parts, airframes, batteries and more are often outsourced overseas and could be expensive and difficult to produce domestically.  Drone companies may have to raise prices to meet the new requirements.

Drone manufacturers were already impacted by the National Defense Authority Act (NDAA) that led to the U.S. military’s campaign to limit Chinese-made drone technology purchased with government funds.  In response to the campaign, U.S. drone manufacturers were quick to label their products as “Made in the U.S.”  Many of those claims, however, were misleading and non-compliant. 

Romeo Durscher, vice president of public safety for Auterion, said “The new FTC rule may just be the crackdown the drone industry needs to set drone makers on the path to more clarity when touting certain claims.”