Even China fosters more innovation these days. Europe feels dead in the water when it comes to innovation, aside from mandating attached water bottle caps...
The climate is changing. US pulling away has forced Europe to accept that there’s other priorities than pure regulation. The draghi report had provided lawmakers, politicians and lobbyists with a useful tool to reprioritise.
And the US becoming a toxic swamp means it’s not a good bet for the future. So while what you say is true for the past, it no longer is.
Having worked at a number of (now failed) American startups, I don't see how Trump's administration will increase competition by reducing monopoly regulation. It's going to exacerbate current dysfunction in the software industry, reduce the number of educated professionals in America and raise the barrier to selling software and designing new, economically competitive hardware.
America's lack of serious competition is one of the reasons I don't start my own business. It's probably the reason half this industry works at a Fortune 500 company instead of being a freelancer or entrepreneur.