The OP's question is provocative and designed to create political debate which it sadly has.
Personally, I tend to avoid political labels and discussions, since they are based more on rhetoric than facts... Having said that, maybe that's why I didn't consider the post "provocative".
TL;DR In the end, it doesn't really matter! (IMHO!)
I fully understand. At some point, like someone mentioned above, if you saw the "Made in Japan" seal you knew you were buying a lower-priced, poorly-made, budget product. That has changed dramatically. Not just for Japan, but for most manufacturing. There is less "mystery" about manufacturing, due to trade deals, industrial espionage, and, as was also discussed earlier, IP theft (Under its many monikers).
Now we have standard manufacturing methods, with CNC and such, so the real difference come to fit-and-finish and quality of the raw materials. Again, since the world has changed so much, very few raw materials are sourced locally (wherever that locality is!). So, in the case of Fender, just as an example, FOR THE MOST PART, they use better woods, better hardware, better electronics and probably spend more time in the final set up. For that reason, they can demand a higher price (Chicken and egg??!??).
Similar argument can be made about mom-and-pop stores vs GC/MF corporate behemoths. What is better for the economy? Accept fewer choices because your cash goes directly back into your community? Or get exactly the instrument you want, recognizing this could be one more nail in the coffin of local retail???
I know, I just presented more questions while answering none!
Thank you for reading this far...
Diego