How does leaving consumers with more money to spend (because they've saved by paying lower prices) lower their standard of living? Thanks.
Because, in the macro view, they have given up their means of earning money to those who produce. They can only spend for a short time without earning more, and they can't earn if their jobs have gone to a foreign country.
It makes little difference how cheap goods are if you don't have any money left to buy them.
Case in point:
The Spanish came back to Spain with a lot of gold from the new world. They used it to buy all sorts of goods manufactured in Italy and other countries who gained the expertise of production.
The end result was that Spain consumed like mad for a while but ended up being very poor after their gold ran out. The producers not only had their gold, but they had the means of production so that they could generate more wealth.
This is the direction America is in danger of heading with respect to India, China, etc.