How does a Californian company compete with a company in Missouri that has lower labor costs and less overhead/ regulation?

They seem to manage this just fine, but it's a pretty similar scenario. You could also push for standardized business costs and regulations eu wide ofc to help.

You boast about the superior quality of german manufacturing. Or move your manufacturing to eastern Germany where costs are lower.

You specialize in things that are more difficult to make in poorer countries - you use your advantages they use theirs. Afterall this is what happened to a lot of Polish industry after we got our EU membership - it died under pressure of already developed competition from countries like Germany.

You don't and that's by design.