US Manufacturers Urge FTC to Investigate Whether AI Shopping Chatbots Hide ‘Made In USA’ Products
- The Alliance for American Manufacturing is urging the FTC to investigate whether AI shopping assistants from major retailers like Amazon are favoring foreign-made products over those made in the United States.
The Alliance for American Manufacturing (AAM) is urging the Federal Trade Commission (FTC) to investigate whether AI shopping assistants from Amazon and other shopping platforms are obscuring products made in the United States and instead elevating cheaper, foreign-made options.
AAM President Scott Paul wrote to FTC chair Andrew Ferguson last week to validate a research paper published last July by the Columbia Law School's Center for Law and the Economy, a policy center that was co-founded by former FTC Chair Lina Khan.
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The paper said Amazon and Walmart's AI shopping assistants can detect and flag fraudulent "Made in U.S.A." claims, but they won't do so simply because, according to what the AIs told the researchers, the economic benefits for the major retailers outweigh the harms.
The paper, which was cowritten by Erie Meyer, a senior fellow who was also Khan's former FTC chief technologist, said this was less a data gap and more a "design choice."
"If accurate, this dynamic is deeply troubling," the AAM letter read. As it is, AI is already deciding what is seen by consumers, prompting brands and retailers to relearn the rules of brand visibility in an internet gatekept by AI agents. The latest advancement in technology is making those agents "active recommendation engines," according to AAM.
"If those systems make it easier for consumers to find products made in China than products made in the United States, the result is not a neutral marketplace," AAM said. "It is a digital environment that disadvantages American manufacturers, weakens consumer choice, and undermines confidence in the integrity of online commerce."
U.S. manufacturing may not be as vibrant as it was in decades past, but American shoppers are eager to support domestic makers. Most (76 percent) Americans prefer to buy products made stateside whenever possible to support job creation and economic growth, according to a 2025 survey by AAM and Morning Consult.
The study, which polled over 2,201 U.S. adults, even found that most consumers (83 percent) would buy more locally made products if they were widely available at major retailers like Amazon and Walmart. However, as the research paper from the Columbia Law School concluded, AI shopping assistants like Amazon's Alexa and Walmart's Sparky have access to data that could clarify what is locally made and what is not, but they decline to do so.
"Consumers who want to support American workers should not be diverted toward Chinese-made products because a marketplace chatbot fails to surface reliable origin information," AAM said. "American manufacturers should not be forced to compete not only against subsidized foreign producers, but also against opaque recommendation systems that determine what consumers can easily find."
This is a consumer issue as much as it one about fair competition and domestic manufacturing. Last December, another Morning Consult survey for AAM found that nearly seven in 10 Americans were concerned that AI could harm manufacturing jobs in the U.S., and those anxieties crossed party lines. AAM said these findings point to how Americans think about AI in relation to its impact on local jobs.
"If marketplace AI systems are steering consumers toward foreign-made goods, obscuring reliable Made in U.S.A. information, or failing to surface domestic alternatives, they risk turning public concern about AI into a concrete marketplace harm," AAM said.
The AAM, founded in 2007 by domestic manufacturers and industrial labor union the United Steelworkers, said the FTC should determine whether the situation calls for new rules. In the meantime, it threw its support for modernizing country-of-origin disclosure laws, specifically Democratic Senator Tammy Baldwin's Country of Origin Labeling Online Act, or COOL Online Act.
The FTC's historically lackluster approach to policing fraudulent Made in the USA claims was also discussed in the research paper, which cited the initiatives the watchdog has launched over the years without any meaningful consequence to the violators.
"The government has had the authority to police 'Made in U.S.A.' fraud for more than a century, and the tools to punish it for decades, yet it chose not to use these levers long before Amazon and Walmart built their chatbots," the paper read.
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