Could you elaborate a little on what this tool is? Are you paying for design work or just manufacturing? Typically with non-trivial mechanical parts there are also jig design costs.
If you're making a PCB then pretty much anything within the design rules goes through the same process. With mechanical parts manufacturing is more complicated. E.g. someone may need to figure out how to hold the part so it can be machined from different directions. If you specify tolerances then it can be a non-trivial exercise in how to sequence things to meet your tolerances. etc.
The cheap part from China possibly includes significantly lower rent, lower salaries, cheaper equipment, no benefits for employees, no insurance, less concern for safety, some corner cutting, an easier regulatory regime (dump that acid down the drain?), possibly economy of scale now that they're doing so much manufacturing.
At any rate, for low volume jobs where the overheads dominate and there's no special knowledge required there's no way the US can compete. Once volumes get up and/or there are some more complex specialized tasks the playing field is more levelled. The kind of manufacturing that Apple does where they have a room full of CNC mills making iPhone casings is not going to be that different. If there was sufficient business/margins in the lower end someone would invest in more automation to try and bridge the gap but most likely it's simply not worth it to participate in this race to the bottom.
When manufacturing people talk about "tooling", they mean custom stamping dies, molds for injection molding, and other one-off items used in making parts. These are complex, custom-machined items usually cut from hard metals and machined to tight tolerances. Designing them is tough, making them is expensive, and if there's a mistake anywhere, it's very expensive to correct.
Take a look at some Youtube videos of progressive stamping for a sense of how ordinary metal parts are produced. Look at the elaborate custom tooling required. All the work is in the tooling. Once the tooling is right, the stamping process is simple and cheap.
If you're making a PCB then pretty much anything within the design rules goes through the same process. With mechanical parts manufacturing is more complicated. E.g. someone may need to figure out how to hold the part so it can be machined from different directions. If you specify tolerances then it can be a non-trivial exercise in how to sequence things to meet your tolerances. etc.
The cheap part from China possibly includes significantly lower rent, lower salaries, cheaper equipment, no benefits for employees, no insurance, less concern for safety, some corner cutting, an easier regulatory regime (dump that acid down the drain?), possibly economy of scale now that they're doing so much manufacturing.
At any rate, for low volume jobs where the overheads dominate and there's no special knowledge required there's no way the US can compete. Once volumes get up and/or there are some more complex specialized tasks the playing field is more levelled. The kind of manufacturing that Apple does where they have a room full of CNC mills making iPhone casings is not going to be that different. If there was sufficient business/margins in the lower end someone would invest in more automation to try and bridge the gap but most likely it's simply not worth it to participate in this race to the bottom.
EDIT: Btw, cool product! Good luck with it.