The described phenomenon has to do with trade protectionism, which is a stupid holdover and anti-conservative. Obviously the thing to do is get rid of those barriers. That will however result (in the short term) in the exporting of manufacturing jobs to the lowest cost locations, which has been happening anyway. Pursuit of lower costs led to mass-production by unskilled or semi-skilled labor at the expense of individual craftsmen.
Just to be fair, has this story EVER played out to the long term?