US don't really produce goods anymore. It has nothing to do with foreign competitors but more due to those scavengers at wall street that eyes, bought over, dissect and sold the business piece by piece and destroyed US Industrial base.
It is NOTHING as you speculated.
1. For centuries, USA followed Free Market principles, open & transparent.
In order for a biz to thrive, an entrepreneur would have to choose between Quality or Quantity for survive in a competitive market. Many smart American entrepreneurs choose Quality, so as to achieve REPEAT customers thru BRANDING. Thus centuries old American biz establishments still survive today.
2a. However, China only followed the capitalist road in 1979 when the moron & devilish Mao whom SLAUGHTERED many thru his insane & prideful economic principles, finally left Earth.
The Chinese People are not fools. They realized that with a population size of 1.4 Billion, all they need to enrich themselves is just to sell cheap dollar products with 9-9-6 workers in sweat shops, with manufactured products that looks good, often copied from others & when they made their millions, they simply close shop & enjoy their wealth, with no concern even about guarantees....
A common China joke on guarantees:-
A man went on a business trip to China and wanted to buy some gifts for his kids. He went to a shop and found a nice looking CD player. Wary of buying inferior goods, he asked the shopkeeper, 'What would happened if this does not work?'
The shopkeeper quietly points to the only sign in English that reads, 'GUARANTEE NO SPOILT'.
Feeling assured, he paid for the CD player and returns to his hotel. He tried to use the CD player after returning to the hotel but it would not even switch on.
He quickly return to the shop and asked for a refund or an exchange for another unit. When the shopkeeper refused to give either, the man points to the sign assuring him of a guarantee.
The shopkeeper then said, 'Brother, you are in China. We read from the right to the left.'
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Such is how those multi millionaires fly by night China operators made their millions.
2b. Furthermore, China is not an open & transparent civilization under CCP rule. Many of their so called 'Treasured National Projects' - in the biz & military supplies field held by private(?) companies are under State Control, & thus even should mishaps or flaws happened, they are quickly covered up & its Press/Media toe the CCP line.
3. USA does not produce much goods is due to supposed Free Market competition, but which is not as Free as one thinks when other nations are NOT open & transparent.
When a Nation realizes how much they had lost due to such unlevel playing field, they will have to take measures, to help inculcate ENTREPRENEURSHIP within their own resource rich country, to earn an honest living, create jobs, provide for the economy, etc.
In the 60s, American parents would teach their kids about entrepreneurship - their kids as young as 6yrs old would set up lemonade drink stalls in the front lawns of their homes to sell lemonade drinks to passer-bys, to earn & save up enough to buy goods they like such as a Barbie doll.....so much had been lost over the years....