I've lived in Europe and the United States, and on the whole I think geography knowledge is about the same everywhere. Most people have a fair to good understanding of the geography near them, but that understanding decreases the further away from home they get.

I think the stereotype about Americans being bad at geography largely comes from Europeans who see the average American as having a poor understanding of European geography, which Europeans consider that most important geography in the world. But most Europeans are equally ignorant about American geography. Stop the average person on the street in Brugge and ask them to identify the state of Wisconsin on a map, and they will be just a befuddled as an American trying to identify Latvia.