1)     Wal-Mart tries very hard to make sure that all the US Flags it sells are made in the US. I suspect therefore that your headline is to wrong. The item you are referring to is a very low cost flag kit which has a US made flag and some imported parts for the pole. Wal-Mart also sell a range of other high quality US flag products all made in the US by Annin, the largest flag company in the world. I am sure Wal-Mart could make more money and sell more flags at lower prices if they sold imported US flags. I am also sure that their PR department would have told you this, if you had given them a decent chance to respond.
2)     It is easy to bash the Chinese for making these recalled products, but I think the press needs to look more in detail at what is going on. In many cases the issue is bad design, which is the responsibility of the US company designing and selling the products, and not the factory on China
3)     Although a high percentage of the American flags we sell are US made, we do sell some US Flags that are made in China. We are proud to be able to offer a choice, so that patriotic Americans on a tight budget can still buy and fly nice flags. Typical customer who buy these products include serving and retired armed forces, retired Americans living on social security & schools often in poorer areas. Who are we to force these people to pay more money for products that they can ill afford?
4)     Several states have recently passed laws requiring that all US flags sold in that state are made in the US., which is contrary to international trade laws and sends a bad signal to other countries. The US is a major producer and exporter of flags of other countries, including the flag of China. US based flag companies including Valley Forge, Annin and Eder and others produce thousands of flags of other countries in several different sizes. Why is it OK for the US to make flags for every other country in the world, but not to allow other counties to make our flag? These other countries are not complaining that we are making their flags, although in some cases there are government permits required to make their flags, which we are ignoring. If we were to require that all flags are made in the countries they represent, companies like us will have to source our international flags from 200 different suppliers overseas!