And suddenly, it’s gone.

After a feel-good decade when the prospects of a sustained American manufacturing renewal seemed tantalizingly close, the news this month of soaring U.S. trade deficits and declining manufacturing output and GDP is sobering.

David Goldman summed up the wreckage last week.

“U.S. real gross domestic product (GDP) shrank at a 1.5% annual rate during the first quarter, more than the preliminary estimate of -1.3%, the Commerce Department reported on May 26. The worst trade performance on record took 3.2% off GDP, more than accounting for the entire drop. Nothing like this has happened before.”

America’s trade deficit in goods spiked to $128 billion in March, or an annual rate of $1.54 trillion, while U.S. manufacturers’ sales plunged after adjustment for inflation. In real terms, U.S. factory sales have fallen by nearly 10% since 2018, and by nearly 20% since 2007.

Consumers spent the lion’s share of the $6 trillion Covid stimulus on imports. That’s another first: U.S. manufacturing never contracted in the past following a big increase in demand.”

At the same time, Goldman notes that, “The biggest increase in U.S. imports came from China, which shipped 55% more to the United States in April 2022 (in seasonally-adjusted dollar terms) than it did in August 2019, when then-president Trump slapped 25% tariffs on most Chinese imports.”

Tariffs are intact. So much for the notion that tariffs slow down imports.

Yet tariffs alone were never going to compel companies to move production onshore without a strategy to also increase domestic manufacturing options. As much as supply-chain disruptions are forcing U.S. companies to rethink where to make products, without stateside options, many will fall back on offshore supply chains.

If that doesn’t change, then the positive news released earlier this month by Harry Moser’s Reshoring Initiative may be all for naught. Moser tracks the stated intentions of companies to reshore manufacturing jobs or invest in U.S. factories (FDI, or Foreign Direct Investment), and the trend continues to be positive.

Moser reported last week that in 2021, “[T]he private and federal push for domestic supply of essential goods propelled reshoring and foreign direct investment (FDI) job announcements to a record 261,000,” adding, “[T]he number of companies reporting reshoring and FDI set a new record of over 1,800 companies.”

More than that, with “5 million manufacturing jobs still offshore, as measured by our $1.1 trillion/year goods trade deficit,” there’s room for more growth in the U.S. sector.

If, of course, we’re successful nurturing a more capable manufacturing ecosystem. Moser isn’t as sanguine as his data suggests: “We see the administration applying tourniquets rather than addressing the underlying issue of U.S. manufacturing cost being uncompetitive.”

Yet we’ve had bad news before, and as Moser also tells me, “There’s a lag from reshoring announcements until production, sometimes years for the megafactories,” meaning the 2021 announcements aren’t manifest on the ground, yet. We need to ensure these companies can follow through on their stated plans.

Here then, is our crossroads. Moser would reverse what he calls America’s “deindustrialization” policy. “If you want to destroy your manufacturing, you’d do what we do,” he says. “Every poor country you want to help, you’d give them favored-nation status to import products to the U.S. with lower duties than they give us; you’d spend billions protecting the rest of the world from pirates and terrorism; you’d allow your universities to flourish in liberal arts and your skilled workforce to decline; and you wouldn’t have a value-added tax to protect your key industries. If you want manufacturing to disappear, that’s what you’d do. And we’ve done that,” he told me last June. It’s worth reiterating.

We’d also focus the national discussion around improving U.S. supply chains on specific action, to the refitting of U.S. suppliers and transparent mapping of supplier networks, across multiple industries, so that buyers can find expertise stateside where it exists.

As Goldman concludes, “China’s strong supply chains and robust manufacturing ecosystem attracted more foreign investment than ever from US companies such as Tesla, accelerating the shift out of onshore manufacturing.”

We’ll revisit what’s happening to reengineer the U.S. supply chain next time, as we push to enable more U.S. companies to manufacture closer to home. Our economy depends on it.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.