Kitted in Miami Is Not Made in USA: What the FTC's 2026 Cases Mean for US Kitting

By Bernardo Campelo, Forbes Business Council E-Commerce Leader, Amazon SPN Certified provider, Amazon SP-API authorized partner, and Founder of PrepVia.

As of October 29, 2026, the Federal Trade Commission's position on products finished in the United States is on the record, in a guidance page and in three federal court orders. In its guide Complying with the Made in USA Standard, the FTC describes a computer imported from Korea and packed in the US in an American-made box. Its conclusion: "Stating Made in USA on the package would deceive consumers about the origin of the product inside." A qualified claim such as "Computer Made in Korea. Packaging Made in USA." would be lawful.

Tariffs have pushed brands to move the last steps of production onshore: final assembly, kitting, bagging and labeling. Some then want the flag on the box. An Executive Order signed March 13, 2026 tells the FTC to prioritize these cases; the FTC followed with a "Made in the USA" sweep on April 14, 2026 and seven warning letters on July 6, 2026.

This post is for brands that kit or repack imported goods in the US, and for the marketing and legal teams who sign off on the box. It also covers the US Customs and Border Protection (CBP) marking rules for repacked imports.

Every date and name below was checked on October 29, 2026 against the FTC's press releases, case pages and warning letters, the Federal Register, the eCFR (version of October 27, 2026) and the US Code, linked where they first appear. Companies named here are described only as the FTC published their cases. This is not legal advice: run any origin claim past your trade or advertising counsel before it goes on a box.

What the FTC Rule Actually Requires

The FTC enforces two layers: Section 5 of the FTC Act, which bans deceptive claims, and the Made in USA Labeling Rule, 16 CFR Part 323, in force since 2021. The rule makes it an unfair or deceptive practice "to label any product as Made in the United States unless the final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and all or virtually all ingredients or components of the product are made and sourced in the United States."

All three conditions must hold at once: US final assembly is necessary, not sufficient. The definition also covers "any unqualified representation, express or implied," including claims that a product is "made," "manufactured," "built," "produced," "created," or "crafted" in the United States or in America. "Built in the USA" on a kit box is the same claim as "Made in USA."

The rule reaches online selling too. Section 323.3 applies it to mail order promotional material, which includes material "disseminated in print or by electronic means," whenever it shows "a seal, mark, tag, or stamp labeling a product Made in the United States." A flag seal on a listing image can bring the rule into play.

How the FTC decides "all or virtually all"

The FTC's July 2026 warning letters spell out the test it applies. It looks at "the proportion of the product's total manufacturing costs attributable to U.S. parts and processing, how far removed any foreign content is from the finished product, and the importance of the foreign content or processing to the overall function of the product." That comes from the FTC's 1997 Enforcement Policy Statement on U.S. Origin Claims.

The guidance adds a warning that matters for kits: "Costs don't tell the whole story." Its examples show why. For a watch made in Nevada with inexpensive Swiss movements, an unqualified Made in USA claim is "likely deceptive," because the movement is what makes it a watch. A lamp assembled in the US with an imported base fails too, because the base is "a significant part of the final product."

What a violation can cost

In its July 6, 2026 letters, the FTC told companies that Labeling Rule violations "could result in an enforcement action in which the Commission seeks payment of redress to injured American consumers and/or the imposition of civil penalties of up to $53,088 per violation." That is the current maximum in 16 CFR 1.98. The FTC announced on September 15, 2026 that its civil penalty amounts "will remain unchanged during 2026."

The 2026 Push: An Executive Order, Three Cases, Seven Letters

The timeline builds on itself. On July 8, 2025, the FTC sent warning letters to four companies, plus letters to Amazon and Walmart "regarding third-party sellers who appear to be making deceptive 'Made in USA' claims about their products on those online marketplaces." Two of those four companies, Americana Liberty and Oak Street, became defendants in April 2026, in actions the FTC describes as following those letters.

The Executive Order

Executive Order 14392, "Ensuring Truthful Advertising of Products Claiming To Be Made in America," directs the FTC Chairman to "prioritize enforcement actions" where a seller's or manufacturer's "Made in America" or similar American-origin claim "constitutes a violation of law."

Section 2(b) is the part marketplaces watch. It says the FTC "shall consider issuing proposed regulations providing that the failure of an online marketplace to establish procedures for verifying country-of-origin claims may constitute an unfair or deceptive act or practice." Note the verb: consider. As of October 29, 2026, the FTC has published no such proposal in the Federal Register, and its 2026 regulatory agenda, published August 14, 2026, does not list one. A marketplace verification rule is a possibility, not a rule.

Until then, the exposure for a false claim on a listing sits with the seller that made it. The FTC's 2025 letter to Amazon cited specific listings and pointed to Amazon's Seller Code of Conduct, which still requires sellers to "Provide accurate information to Amazon and our customers at all times" in Amazon's selling policies as of October 29, 2026.

The three April cases

Two of the three cases turned on US assembly of imported parts, and in both the FTC's position was that US assembly does not cure significant foreign content. The orders were entered between April 15, 2026 and April 30, 2026, so these are court orders now, not proposals.

The third case is about a kit. According to the FTC's complaint, the defendants sold "sectional flagpole kits and telescoping flagpoles kits," and "all of the parts and accessories that are included in the Americana Flagpole Kit are wholly imported from China." The FTC's complaint looked at what was inside the kit.

The July 2026 letters

On July 6, 2026, the FTC sent warning letters to seven companies "selling products such as drums, industrial laser machinery, coordinate measuring machines and e-cigarettes." Six letters concern Made in USA claims. The seventh, to A&F Drum Company LLC, concerns "made in Texas" and "handmade in Austin, Texas." A state claim is a US-origin claim too.

A warning letter is not a finding: the letters say they do "not reflect a formal determination," and ask for a compliance plan "within five (5) business days of receipt." But two of the 2025 letters turned into 2026 lawsuits.

Why a Kit Does Not Change Where the Product Was Made

Return to the FTC's computer example. The box, the foam and the packing are American, and none of that changes the origin of the product inside. A kit of imported products works the same way: the poly bag, the shrink wrap, the insert card and the kit barcode are US work. The products are not.

Apply the FTC's three factors to a kit built from finished imported units. The foreign content is most of the manufacturing cost. It is not "far removed" from the finished product: it is the finished product. And it is what the buyer is paying for. A kit made mostly of US-made products with a small imported accessory is a different calculation, to do product by product with counsel, with the watch and lamp examples as the warning.

"We can kit it, bag it and label it in Miami. That does not make it Made in USA, and the FTC has been clear about that."

Bernardo Campelo, Founder of PrepVia

The same goes for a listing: calling a set "American-built" because it was assembled in a US warehouse makes the claim the box was careful not to make.

Where CBP comes in

CBP decides the country of origin for import marking, using the "substantial transformation" test, which the FTC's guide describes as "a manufacturing process that results in a new and different product with a new name, character, and use that is different from that which existed before the change." CBP decides it "on a case-by-case basis." Under 19 CFR 134.1(b), further work done in another country must "effect a substantial transformation" before that country becomes the country of origin. Goods from Mexico or Canada follow the USMCA rules in 19 CFR part 102.

Passing CBP's test is not the end: "Even if CBP determines that an imported product doesn't need a foreign country-of-origin mark, that doesn't necessarily mean it's permissible to promote that product as Made in USA." A brand needs both answers: CBP's on origin marking, and the FTC's on the claim.

"Assembled in USA" and Other Qualified Claims

If the product is not all or virtually all American, the FTC allows a qualified claim, one that "describes the extent, amount or type of a product's domestic content or processing." Its examples include "60% U.S. content," "Made in USA of U.S. and imported parts," and "Couch assembled in USA from Italian Leather and Mexican Frame." The court orders entered in 2026 use the same structure: a qualification must appear "immediately adjacent to the representation" and accurately convey the foreign content.

Qualified claims are not a free pass. The FTC tells marketers to "avoid qualified claims unless the product has a significant amount of U.S. content or U.S. processing," and says a qualified claim "must be truthful and substantiated." In its treadmill example, about three percent US parts rules out "Made in USA of U.S. and Imported Parts," while "Assembled in U.S.A." works because the US assembly is significant work.

What "Assembled in USA" takes

"Assembled in USA" looks like the fallback for a kit. The FTC sets a higher bar. A product with foreign components may say "Assembled in USA" without further qualification "when its principal assembly takes place in the U.S. and the assembly is substantial," and its last substantial transformation "also should have occurred in the U.S." Then the key sentence: "a simple 'screwdriver' assembly in the U.S. of foreign components into a final product at the end of the manufacturing process doesn't usually qualify for the 'Assembled in USA' claim."

The FTC's example: a computer whose imported components are put together "in a simple 'screwdriver' operation in the U.S." An "Assembled in U.S." claim without further qualification for it "is deceptive." A box of three finished products is less work than that.

The fourth row follows the FTC's examples of specific processing claims, such as "Bound in U.S. Printed in Turkey" and "Hand carved in U.S. Wood from Philippines," and its example of a product designed in New York and made in Finland that says both on the label. The FTC says such a claim "would not lead a reasonable consumer to believe that the whole product was made in the U.S."

The Customs Side: Marking Rules When Imports Are Repacked

The FTC governs what you claim. CBP governs what the product must say. Under 19 U.S.C. 1304 and 19 CFR 134.11, every article of foreign origin imported into the US must be marked "in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit," so the "ultimate purchaser in the United States" can see the English name of the country of origin.

Under 19 CFR 134.1(d)(2), if US processing "is merely a minor one which leaves the identity of the imported article intact," the consumer who buys the article afterward is the ultimate purchaser. For a kit of intact imported units, the origin mark has to reach the shopper.

The repacking certificate

Section 134.26 covers goods that will be repacked into retail containers after release. The importer must certify to CBP that if it does the repacking, it "shall not obscure or conceal the country of origin marking appearing on the article, or else the new container shall be marked to indicate the country of origin." If the importer sells or transfers the goods to another repacker, it must "notify such purchaser or transferee, in writing, at the time of sale or transfer." The certificate is filed at entry summary and can be a blanket one, for a calendar year for example.

This duty sits with the importer of record. If a 3PL or prep center builds the kits, the importer's written notice is what tells the repacker the rules. Our post on who the importer of record is when a 3PL receives the container covers that role. The narrow exception in 134.26(f), for a container the buyer can readily open, does not apply when it "bears a U.S. address or other potentially misleading marking."

A US address on the box

That last phrase connects to 19 CFR 134.46. When "United States," "American," "U.S.A.," or "the name of any city or location in the United States" appears on an imported article or its container in a way that may mislead, the country of origin must appear "legibly and permanently in close proximity to such words, letters or name, and in at least a comparable size," preceded by "Made in" or "Product of." A kit box that says "Packed in Miami, FL" or carries the brand's US address prominently may need the "Made in" mark of each product's country right next to it.

The FTC is "not likely" to treat "the mere listing of a company's U.S. address on a package label in a non-prominent way" as a US-origin claim. Both can be true: a small address line may not be a Made in USA claim, and CBP may still require the origin mark beside it.

What getting it wrong costs on the customs side

• Additional duty. An article not marked as required owes "a duty of 10 per centum ad valorem" under 19 U.S.C. 1304(i), unless it is exported, destroyed or marked under customs supervision before liquidation.
• Certification failures. Missing the 134.26 certification can bring liquidated damages, and fraud or negligence in it a penalty under 19 U.S.C. 1592.
• Criminal exposure. Anyone who, "with intent to conceal," covers, obscures or removes a required origin mark can be fined up to $100,000, imprisoned up to one year, or both for a first conviction, and fined up to $250,000, imprisoned up to one year, or both for a later one, under 19 U.S.C. 1304(l). The regulation at 19 CFR 134.4 still shows an older $5,000 figure; the statute controls.

The FTC lists the same conduct as import fraud to report to CBP: "removing a required foreign origin label before the product is delivered to the ultimate purchaser (with or without the improper substitution of a Made in USA label)." The question for every kit is whether the box hides the mark.

What to Ask Your Prep Center Before It Builds Your Kits

A prep center builds the kit to your specification. It does not decide your country of origin or write your origin claim. Settle these points in writing before the first batch:

• Origin on the build sheet. Ask that the kit's build sheet list each component with the country of origin marked on it.
• Barcode versus origin mark. For FBA, Amazon's inbound guidance says "Make sure that all other scannable barcodes are fully covered," so kit builds cover the component barcodes. A covered barcode is fine; a covered origin mark is not. Ask how the build keeps origin marks visible, or how the outer container carries them.
• The importer's notice. If you, as importer, are transferring goods to the prep center for repacking, send the written notice 19 CFR 134.26 requires, and keep a copy.
• The words on the box and the bag. Give the prep center the approved origin wording, including any "Made in" text that must sit next to a US address, and ask for a photo of the finished sample before the batch runs, so legal sees what the shopper will see.

PrepVia receives imported freight in Miami and routes it into Amazon FBA, and it builds kits, bundles and multipacks with FNSKU labeling and box packing from one warehouse at 8507 NW 72nd St, Miami, FL 33166. Discrepancies are reported within 24 hours of arrival, with photos. The origin decision stays where the law puts it: with the brand, the importer of record and their customs broker and counsel. For certificates and battery questions on a kit, see our guide to kitting regulated products.

Frequently Asked Questions

Can I label a kit Made in USA if I assemble it in the United States?

Not if the products inside are imported. Under 16 CFR 323.2, the product needs US final assembly, all significant processing in the US and all or virtually all US components. US packing alone does not qualify.

Is "Assembled in USA" a safe alternative for a kit?

Usually not. The FTC requires substantial principal assembly in the US and the last substantial transformation here, and says a simple "screwdriver" assembly "doesn't usually qualify." Placing finished products in one box is simpler than that.

What can a kit of imported products say instead?

A specific, accurate processing claim, modeled on the FTC's "Computer Made in Korea. Packaging Made in USA.", or no origin claim at all. Any claim has to be truthful and substantiated, so have counsel review the wording.

Did the FTC create a new rule for marketplaces in 2026?

No. Executive Order 14392 tells the FTC to consider proposing one. As of October 29, 2026, the FTC has not published a proposal. Enforcement against sellers went ahead anyway.

What are the penalties for a false Made in USA label?

Civil penalties of up to $53,088 per violation under the Labeling Rule, plus consumer redress. The April 2026 orders required payments of $625,000, $167,743 and $75,000.

Who is responsible for the origin marking when a prep center repacks imported goods?

The importer. Under 19 CFR 134.26, it certifies to CBP that repacking will not obscure the origin mark, or that the new container will be marked, and notifies any other repacker in writing.

Final Take

Moving the last step of production to the US does not move the origin of the products inside. The FTC's guidance says so, the April 2026 cases apply that view to US-assembled products and to a kit, and CBP's rules make the importer answer for every origin mark the kit box might hide.

Decide the claim before you design the box: get counsel's sign-off, have your importer send the repacking notice, and make sure whoever builds the kit knows which marks must stay visible.