Lawmakers Urge FTC to Stop Chinese Companies From Undermining US Flag Industry

Rep. Elise Stefanik (R-N.Y.) speaks at the 2024 Road to Majority Conference in Washington on June 21, 2024. Madalina Vasiliu/The Epoch Times

Three House Republicans are calling on the Federal Trade Commission (FTC) to take action against China-based companies fraudulently advertising their American flags as “Made in the USA” on online retail platforms.

The letter, sent to FTC Chair Lina Khan on Nov. 1, was led by House Republican Conference Chair Rep. Elise Stefanik (R-N.Y.) and joined by Reps. Virginia Foxx (R-N.C.) and Nick Langworthy (R-N.Y.).

“This fraudulent behavior deceives American consumers seeking to show their patriotism, threatens our domestic flag industry, and undermines the integrity of ‘Made in the USA’ advertising and labeling,” they wrote.

The lawmakers urged Khan to “promptly hold” these Chinese companies and online retailers accountable for “violating trade laws and undermining ... domestic American flag manufacturers.”

They named Amazon and Walmart as two online retail platforms that Chinese flag manufacturers have used to sell their products. To illustrate their point, they said that a search for an American flag on Amazon showed one made by a company called Hawks Flag Store. Even though the product listing had the words “100 [percent] Made in USA” in bold text, the lawmakers said the company’s profile on Amazon showed an address in Ji’an, a city in China’s Jiangxi Province.

“Unfortunately, this egregious example of advertising deception is just one of hundreds across various online retail platforms,” the lawmakers wrote, adding that “the FTC has the authority to bring complaints and law enforcement actions against misleading claims surrounding the origin of a product.”

“We urge the FTC to implement enforcement measures without delay, open Made in USA complaints against these fraudulent companies, and increase collaborative efforts with major online platforms to verify seller claims and uphold truthful advertising standards,” they wrote.

The lawmakers’ effort to tackle the issue drew applause from the National Council of Textile Organizations (NCTO).

“The U.S. flag industry and textile industry as [a] whole is facing economic distress—having lost 21 plants in the last 18 months—due to a flood of cheap, falsely labeled and subsidized imports, a lack of trade enforcement, and the gaping de minimis loophole that is allowing these bogus products to enter the U.S. from China duty free and uninspected,” NCTO President and CEO Kim Glas said in a statement.

“That is why it is imperative that the FTC act immediately to put a stop to illegal labeling and advertising practices by Chinese companies that are duping American consumers who take pride in displaying authentic American-made flags.”

In September, the Biden administration announced new steps to crack down on abuse of the de minimis loophole, a trade exemption that allows packages valued at less than $800 to ship to the United States with relatively little customs scrutiny.

Last month, four Democratic senators sent a letter to Treasury Secretary Janet Yellen and Homeland Security Secretary Alejandro Mayorkas, asking their agencies to end the trade exemption so that drug traffickers cannot exploit the loophole to fuel the fentanyl crisis in the United States.

Currently, U.S. Customs and Border Protection processes about 4 million de minimis shipments per day.

Julye Spinelli, owner of Saratoga Flag Company, also welcomed Stefanik’s leadership on the issue.

“In Upstate New York, we have seen a 100% increase of China-made American Flags in circulation,” Spinelli said in a statement. “The FTC needs to immediately start enforcing current U.S. laws to stop the flood of imported ‘counterfeit’ U.S. Flags. Congresswoman Stefanik, and her dedicated staff, are fierce advocates for our American Flag and our domestic industry of U.S. flagmakers.”

In June 2023, Stefanik and a bipartisan group of lawmakers introduced the Make American Flags in America Act (H.R.4137). If enacted, it would require American flags “displayed on federal property or procured by federal agencies to be manufactured completely in the United States from American materials,” according to a statement.

Citing data from the Flag Manufacturers Association of America, Stefanik’s office said in the statement that 94 percent of American flags were manufactured in the United States and pointed out that although “100 [percent] of flags bought by the Department of Defense are manufactured in the U.S. ... other federal agencies are only required to purchase flags that are only 50 [percent] manufactured in the U.S.”

The Epoch Times contacted the FTC, Amazon, and Walmart for comment but received no responses by publication time.