Obama's picture was put on the mug mistakenly instead of England defender Chris Smalling, the report said on Tuesday.
The mug has a picture of Obama with the text below the image which reads, "Chris Smalling World Cup squad Brazil 2014".
"Wholesale Clearance UK based in Poole, Dorset, bought the mugs as factory seconds after a mix-up by an employee at the manufacturers. They are now being sold off as novelty items. A quarter of the consignment of 2,000 mugs were bought by people in the US," the report added.
Karl Baxter MD for Wholesale Clearance explained to "metro.co.uk": ‘The Dorset company in question was given the seemingly easy job of sourcing royalty free pictures of each England squad player to use on the England mugs - along with other accompanying items such as England coasters, England mouse mats etc.
‘They passed this onto to their young, bright eyed and bushy tailed new apprentice. The designs were proofed and signed off by their boss, who had clearly had a heavy night with the lads playing poker and before he'd had his first vat of coffee the following morning.
‘They immediately contacted us and 2,000 of the England items was dispatched to our warehouse. We eagerly unpacked them and, indeed it turned out that the Chris Smalling cup had Barack Obama's head on instead of Chris's.'
England have been knocked out in the first round of the World Cup. However, they complete their Group stage tonight when they face Costa Rica. USA still have a chance of qualifying for the Round of 16.