{"id":534,"date":"2026-07-30T19:11:16","date_gmt":"2026-07-30T19:11:16","guid":{"rendered":"https:\/\/frontierhousingreport.com\/?p=534"},"modified":"2026-07-30T19:11:16","modified_gmt":"2026-07-30T19:11:16","slug":"the-great-made-in-the-usa-fraudyssey","status":"publish","type":"post","link":"https:\/\/frontierhousingreport.com\/?p=534","title":{"rendered":"The Great \u2018Made in the USA\u2019 Fraudyssey"},"content":{"rendered":"
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Perhaps you\u2019re feeling patriotic during America\u2019s 250th anniversary, and you just want to treat yourself to some fine American-made goods. It almost feels natural these days to start by browsing Amazon or Walmart, two of the largest retailers in the world, to see if there are any good deals on, say, fly-fishing reels.<\/p>\n

Read more Abdul El-Sayed Lost in 2018. It Set Him Up for 2026.<\/a><\/p>\n

Hoping to save time on Amazon, you turn to the retailer\u2019s Alexa for Shopping AI chatbot to find a reliable, U.S.-made reel. \u201cSorry, I don\u2019t have access to that information,\u201d Alexa says. That\u2019s weird. You adjust the query and remove the U.S.-made condition. At that point, Alexa comes through with an extensive selection. What that search did not yield, however, were the American-made products you were hoping for.<\/p>\n

More from James Baratta<\/strong><\/em><\/p>\n

You figure you\u2019ll give it another shot, adjusting the query once again. Instead of \u201cMade in the USA,\u201d you go with \u201cin USA,\u201d and sure enough, Alexa shows you what you had been looking for this whole time.<\/p>\n

Erie Meyer and Zachary Harris, senior fellow and program manager at Columbia Law School\u2019s Center for Law and the Economy, respectively, ran this exact query sequence as part of the methodology for a report investigating the capabilities of Amazon and Walmart\u2019s chatbots to identify where the products on each of their platforms originate. According to the findings of that report, Amazon and Walmart, despite having the technical ability to detect which products are U.S.-made, suppress those products in search results generated by the retailers\u2019 respective chatbots.<\/p>\n

\u201cIn other words,\u201d the authors write, \u201cthe AI has been tuned to protect the visibility of Chinese-manufactured goods over American ones.\u201d<\/p>\n

It\u2019s a deliberate business strategy. The retailers\u2019 own chatbots said as much. \u201cThe FTC pursues relatively few cases against retailers \u2026 That\u2019s a business calculation, not a legal justification,\u201d Walmart\u2019s chatbot Sparky said in response to queries about whether Walmart was following the law.<\/p>\n

\u201cThey can spot \u2018Made in USA\u2019 fraud on command,\u201d Meyer said. \u201cHiding it was a choice and it shows the dangers of unregulated agentic shopping.\u201d<\/p>\n

To the ire of the 71 percent of Americans who intentionally seek out American-made products, neither Amazon nor Walmart offers a way to filter searches for countries of origin. Amazon and Walmart did not respond to the researchers, offer technical corrections, or dispute the findings of the report. (A petition asking Amazon to create a \u201cMade in the USA\u201d filter has amassed roughly 25,000 signatures since 2018.)<\/p>\n

It\u2019s the first major report from the center since Columbia Law School established it three months ago. Dedicated to the study of how law shapes economic power, the center is led by Lev Menand, a champion of monetary reform and former Treasury official who, before that, was an economist at the Federal Reserve Bank of New York, and antitrust crusader Lina Khan, chair of the Federal Trade Commission (FTC) under the Biden administration.<\/p>\n

Read more Employers Stall Labor Contracts for Years. A New Bill Could Change That.<\/a><\/p>\n

\u201cAmericans are being told that sophisticated AI agents can offer them personalized services,\u201d Khan said. \u201cThis empirical study shows that Amazon and Walmart deploy this sophistication selectively, responding to customer searches for \u2018Made in USA\u2019 goods by hiding American-made products while mislabeling imported ones\u2014a tactic that their own AI agents describe as a business choice to promote foreign suppliers.\u201d<\/p>\n

Less than a month after Khan was sworn in as FTC chair, commissioners adopted a rule allowing the agency to seek civil penalties for false \u201cMade in the USA\u201d claims. It was a long time coming, as Congress authorized the FTC to impose such penalties in 1994. Moreover, the agency has had the authority to ban \u201cunfair methods of competition\u201d since 1914, setting the table for the government to police deceptive advertising.<\/p>\n

During her tenure as chair of the FTC, Khan brought nearly a dozen enforcement actions against companies falsely claiming their products were American-made. Fines levied against those companies ranged from north of $100,000 to more than $3 million.<\/p>\n

President Trump\u2019s FTC, by contrast, has sued three small companies and sent some warning letters to likely violators. Between the administration designating July 2025 \u201cMade in the USA\u201d month, and the president issuing an executive order in March directing the FTC to prioritize enforcement actions in cases involving false American-origin claims, how could it be that Amazon, Walmart, and their executives have been able to evade regulatory scrutiny? Perhaps it\u2019s because these are massive businesses that gave over $1 million collectively to Donald Trump\u2019s inaugural fund last year.<\/p>\n

\u201cEven as AI tools continue to grow in sophistication and capability, business incentives will shape how these advancements get deployed,\u201d Khan said. \u201cPolicymakers and enforcers have a vital role to play to ensure the public doesn\u2019t get the short end of the stick.\u201d<\/p>\n

Given that most statutes authorize a private right of action, state attorneys general, private plaintiffs, and class counsel \u201ccan all pursue claims against \u2018Made in USA\u2019 misrepresentations,\u201d the report explains. Still, the authors have encouraged policymakers to establish a federal private right of action for platform-driven fraud, writing that the public \u201cneeds the right to defend itself, especially when the government has the authority but not the will to act against powerful companies.\u201d They have also called on Congress to hold oversight hearings of the FTC, and corporations that deploy agentic AI systems, among other recommendations outlined in the report.<\/p>\n

\u201cPolicymakers have spent years worrying about losing the AI race to China,\u201d the authors write. \u201cThis investigation reveals a version of this race that nobody is talking about\u2014one that the United States is already losing.\u201d<\/p>\n

Read more Louis Brandeis: The Empiricist<\/a><\/p>\n<\/div>\n


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