Two more companies, Sandpiper and PiperGear, manufacturers of deployment bags and tactical gear, marketed their wears to active and retired American military personnel, branded themselves online as #MadeInUSA, and put “American Made” tags in some of their products. In reality, most of those goods were also manufactured in China, according to the commission.
Mr. Trump’s handpicked chairman of the commission, Joseph J. Simons, defended the decision not to impose penalties on the companies. In a statement, Mr. Simons said “the threat of significant penalties” going forward had “been largely successful in keeping companies under order from making deceptive ‘Made in U.S.A.’ claims.” He argued that the decision was consistent with how the commission had dealt with similar cases in the past, and said it was a “strategic choice” to use the commission’s “limited resources” simply to make sure the companies did not break the law in the future.
But on Tuesday, one of the Democratic commissioners who had previously sided with Mr. Simons changed her position. “I am persuaded that we should seek disgorgement of ill-gotten gains and an admission of liability in these cases,” Rebecca Kelly Slaughter wrote in a dissenting statement. “And I understand that, if the companies refuse to agree to such terms, we would have to expend substantial resources for, and take on the risk associated with, litigation.”
The more stringent penalties, Ms. Slaughter said, “would send an unmistakable message that there will be meaningful consequences for brazenly mislabeling wholly imported products as American-made — even the first time that a fraudster gets caught.”
The agency’s other Democratic commissioner, Rohit Chopra, is taking the crusade against violators a step further, attempting to change the agency’s entire approach to handling “Made in America” violations.
Mr. Chopra, in a dissenting statement, argued that the F.T.C. was given the authority to activate steep penalties on first-time violators since the North American Free Trade Agreement was passed in 1994 but has simply never used it. Mr. Chopra said he wanted the trade commission to activate a legal switch to “turn on” penalties that would make violators pay $42,530 in fines per violation, starting on the first offense.
In many cases over the past two decades, settlements with companies that violated “Made in America” rules were subject only to record-keeping and reporting requirements to make sure they did not violate the law again.
“We cannot effectively protect honest businesses and promote fair competition if there are no consequences for violating the law,” Mr. Chopra said in his dissenting opinion. “Given troubling trends in today’s economy, I intend to make a motion to pursue a Made in U.S.A. rule that would allow the commission to seek meaningful penalties against those that harm law-abiding companies that make goods in America.”