It's helpful to do that because it provides like-with-like comparisons.

Functionally the EU operates with zero internal customs etc, free movement of people etc. It also represents a population group of a similar size to the US and China.

In the same way, breaking down manufacturing in the US by state, and comparing each state to China is not helpful, so dealing with each European country invidually in the comparison would not be helpful.

Shouldn’t Canada and Mexico be combined with the United States based on those criteria? NAFTA is still a thing.

I thought of that as well. But while there is a mostly free movement of goods, there isn't a free movement of people.

Plus from a motivational point of view adding in Mexico and Canada does nothing for those keen to improve the state of US manufacturing. Inside Europe there would be similar reports comparing the individual countries - and I suspect at the US state level there might be studies as well.

With the free movement of people though internal competition is less beneficial. (although geographic spread is still desirable.)