How did American companies deal with the competition of other countries?

They make better products

Answer: The American economy is clearly struggling to recover from a recession of unusual depth and duration, as we are reminded nearly every day. But the United States also faces a less visible but more fundamental challenge: a series of underlying structural changes that could permanently impair America's ability to maintain, much less raise, the living standards of its citizens. If government and business leaders react only to the downturn and fail to confront America's deeper challenge, they will revive an economy with weak long-term prospects.