For many classes of bulk goods, freight was becoming 50-100% or more of total landed cost for goods imported from China, which overwhelmed labor cost differentials. In addition, Chinese production problems provided more reasons to move production closer to demand.
But US labor costs increased substantially during the labor crunch of 2021. Prevailing wages that were around $15 ramped to $18-22 as companies worked to compete against the likes of Amazon hiring hundreds of thousands of warehouse workers. Entry level Chinese wages have not increased nearly as much.
So if freight costs collapse such that the landed cost only has 25% of landed cost as freight, and US manufacturers have experienced an increase in labor costs relative to Chinese production, this could spell some very challenging times over the next 1-2 years as a recession applies cost management discipline on the supply chain and US manufacturers find themselves in potentially an even worse comparative cost position than pre-pandemic, vis-a-vis offshore production.
This is also why many US manufacturers were wary about adding capacity: they know about the bullwhip effect, and they also knew that it would affect not only consumer demand but also their supply chain advantage versus offshore production, and so any capital intensive capacity added to meet short-term demand may go idle 1-2 years afterward. And most manufacturing capacity doesn't pencil out if you only get a couple years of good utilization out of it.