As for companies looking for loopholes, it may be fun to blame it on Asian manufacturers. I would suggest that Americans take a good long look in the mirror. US companies were outsourcing assembly to Mexico long before Mexico came under the NAFTA umbrella. Quite often, at least with electronics, those US companies were using parts manufactured in Asia. Should Asian companies hold themselves back, should they avoid using the same practices as their American counterparts, just because it isn't fair to Americans? If anything, they have less reason to because Asian countries are responsible to their own citizens, not to Americans.
I am not "Blaming Mexico" - I am pointing out that the policy as I described it made no sense from American perspective. You are right that the American manufacturs did assembly in Mexico (form Asian components) before as well but it's the same point - an essential Asian good masquerading and benefiting from being a "north American one"
Early on, it may have included semiconductors designed in the US, with manufacturing outsourced to Asia. That outsourcing may have been to a facility owned by an American company or to a foreign owned company. Then the semiconductors may have been shipped to Mexico where another company was manufacturing consumer products. Under such circumstances, can such a product be described as essentially Asian?
Of course, things changed. Asian companies took more control over product development and manufacturing. When they ran into labour and regulation making manufacturing in their own country more expensive, perhaps due to tariffs or perhaps due to their own citizens demanding better, they used the same playbook.
You're right in that it made no sense from an American perspective, but that isn't because it suddenly became cheaper to manufacture in the US. It did not make sense because they lost control of the playbook, because others could do it better.
On the whole, I agree with your point about trade being used to bypass labour laws and environmental regulations. I'll be more blunt with how I phrase it: the practice is exploitative and causes more harm than good. That said, the current American response appears to be driven by the demand for trade on their terms exclusively. Never mind that other countries may want something in exchange for their resources.
Trump imposed tariffs on an island populated only by penguins.
So on one hand it's government regulation that makes us not compative. On the other hand the government doesn't ensure this happens by making it easy to bypass via mexico. So the end result is the environmental protections don't kick in and Americans don't make the high (or any) wages.
So we either drop those laws and open up trade, or we keep those laws and make it harder to bypass. Those are the two non-dumb options.