Cutting tool executive cautions manufacturers about ‘Made in USA’ label

Eighty percent of Americans prefer to buy American-made goods than imported ones. Moreover, 60 percent of Americans are willing to pay 10 percent more for a U.S.-manufactured product than the same type of product made overseas, said Pierre Viaud-Murat,  vice president of sales at cutting tool manufacturer Ceratizit USA Inc.

U.S. toolmakers should “claim the origin of [their] products,” he said during a speech at an industry event hosted by the grinding-machine and EDM builder Vollmer. Viaud-Murat pointed out, though, that manufacturers should not claim a product is U.S.-made if it isn’t. Doing so could result in legal action against the offending company, initiated by the Federal Trade Commission.

According to FTC rules, claiming a product is U.S.-made requires that “all or virtually all” of the product be produced in the U.S. The FTC states: “ ‘All or virtually all’ means that all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no — or negligible — foreign content.”

Viaud-Murat cited examples of products that did and didn’t meet the commission’s U.S.-origin requirements:

• A gas grill fabricated in America that incorporates knobs, tubes, pipes and assorted fittings manufactured in Mexico met the FTC standard. The Mexican components weren’t considered integral to the grill’s operation.
• A lamp consisting of an imported wood base and a U.S.-made metal stand and glass shade did not meet the standard. The commission deemed the imported base a “significant” component of the lamp.
• A wrench made from a Chinese forging was ruled as not made in the U.S., despite the fact 85 percent of the tool’s value came from grinding processes performed in America.

U.S. companies should use a qualified origination term when foreign content in their products exceeds FTC rules. Examples include:

• “Made in U.S.A. of U.S. and Imported Parts.”
• “Designed in U.S.A., Made in China.”
• “Ground and Coated in U.S.A.”
• “60% U.S. Content.”

Besides cutting tools, Ceratizit USA, Warren, Mich., produces carbide powders and carbide blanks in Pennsylvania. “Using U.S.-made carbide blanks is a marketing opportunity” for American toolmakers, said Viaud-Murat, noting that Ceratizit USA’s powders and blanks cost approximately 3 percent more than those produced at the parent company’s plants in China.

Sales of the company’s American-made blanks and powders are “doing well,” Viaud-Murat said, and output can be increased if demand rises.

[Note: Cutting Tool Engineering magazine is written, edited, produced and printed in the U.S. on U.S.-made paper.—Ed.]