‘When China makes coffee pots for $5 and the U.S. makes them for $20 that means, in his eyes, we make more.’
Actually if China made coffee pots for $5 and it would cost $10 here, we would make none at all, since nobody would pay $10 for a $5 coffee pot.
Actually, that's probably not accurate. They wouldn't be sold for $10 here, they'd probably be sold at a price point that is 10-15% less than the American made price point. So, if the price point for the American coffee pot is $30, then the Chinese version would be (roughly) $26-27, even though it only cost $5 to make. That's why companies move to China - there's exponentially more profit potential there.
As several others have pointed out, the Apple products are a great example of this. For what Apple charges (and gets) for the iPhone, they could still make money hand over fist even if the entire phone was built and assembled in the US. But, they can make exponentially more money if they produce in China, instead. The iPhone costs somewhere between $6-15 (depending on published report) to manufacturer in China. That same phone would cost about 7-8, times that. BUT, the iPhone is sold at a multiple between 40-50. See the difference?
Completely ignored the point of my post. Not surprised.