The real reason why the USA can't compete in global manufacturing --- poor leadership.
Leadership that caters to special interests instead of the overall, long term benefit of citizens and organizations.
Nothing illustrates this better than energy policy and the foibles thereof.
Ethanol is a particularly bad idea that only came about due to the farm lobby.
Solar and renewables are progressing despite policy oppostion.
Cheap energy offers a significant competituve advantage --- that USA policy openly and stupidly rejects.
> The real reason why the USA can't compete in global manufacturing --- poor leadership.
I'd say it's partially that, but it's also priorities.
When the Boomers were coming of age 40 years ago, they didn't want to work in factories like their parents had, and they didn't want to pay the prices necessary to pay American workers to make goods in an environmentally-responsible manner.
So they gladly bought things made in China where - at the time - the average person would rather work in a factory than on a peasant farm, the labor was cheap, and whining about things like "air quality" and "potable water" were either not a high priority, or would get you dealt with by the local Party representatives who had been told that putting that new factory in was the difference between them advancing up the ranks or being sent to a re-education camp.
If anything, China was the ultimate caterer to special interests, those being the Western companies who wanted to do business there without having to deal with hiring Westerners.
How about Bill Gates as US's Benevolent Dictator For Life?
It's not that our leaders are uniquely bad (do you think the CCP leaders are better?) but that the incentives for that kind of economic development aren't there.
Largely due to, as you point out, special interests.
EDIT: judging by the comments everyone here seems to love China
It's not just the farm lobby, it's baked deep into the constitution and the political geography so that vast empty land stretches have hugely disproportional political power.