It's actually not labor costs at all.

The difference between the USA and, for example, China, in manufacturing is the difficulty of getting a new factory built.

If you have a product designed and ready for production, it will take you years to build a factory in the USA. All the while you'll be losing money managing the build, paying your employees and, most importantly, letting your competitors get a head start.

Likewise, if you build that factory in China, it'll be up and running in less than a year and you can start making your R&D money back, get to market before your competitors and not bleed money keeping your companies doors open.

The labor costs are easily offset by removing the logistics of moving the product.

Tesla Gigafactories are a pretty good example of this. The first two took ~3 years to build in Nevada and New York. The third, in Shanghai, took 10 months.

'Company learns from mistakes, third time it does something it does it better, quicker'