Designing resilient Republic of Korea–US supply chains under US trade policy changes: a quantitative location analysis

Purpose Recent US trade and industrial policies, including the 2022 Inflation Reduction Act and the CHIPS and Science Act, have increased nearshoring pressures and heightened supply chain risks for Korean firms operating in the US market. This study aims to examine how Korean firms can design cost-efficient and resilient supply chains linking Korea and the USA. Using a mixed-integer programming (MIP) model, the study identifies optimal intermediate distribution center locations and evaluates their robustness under disruption scenarios such as port strikes and transit delays, thereby providing quantitative decision support for supply chain configuration under policy uncertainty. Design/methodology/approach This study develops a MIP model to identify the optimal location of intermediate distribution centers in a supply chain connecting Korea and the USA, with the objective of minimizing total logistics costs, including transportation and inventory costs. The model is applied to a real-world case and extended to larger-scale settings. To evaluate robustness, sensitivity analyses are conducted under multiple disruption scenarios, including labor strikes at major US West Coast ports and transit delays through the Panama Canal. This framework enables a systematic comparison of alternative sourcing and location strategies in terms of cost efficiency and supply chain resilience. Findings Using a case study of a Korean logistics company exporting components to the USA, the analysis compares four alternative supply chain configurations involving different intermediate distribution center locations and sourcing strategies. The results show that sourcing from a manufacturing facility in Mexico with a distribution center located in Atlanta is the most cost-efficient and resilient option under disruption scenarios such as US West Coast port strikes and Panama Canal delays. This outcome reflects Mexico’s strong economic integration with the USA under the USMCA, which reduces exposure to transoceanic and port-related risks. Originality/value This study advances the supply chain literature by explicitly analyzing the implications of recent US trade and industrial policies, particularly the Inflation Reduction Act and the CHIPS and Science Act, for global supply chain design. While existing research has largely overlooked the operational consequences of these policy shifts, this paper addresses this gap by adopting a cost-based perspective on location and sourcing decisions. Unlike prior studies that emphasize market attractiveness or political stability, it applies a MIP framework with scenario-based sensitivity analyses to quantitatively evaluate supply chain resilience, thereby extending predominantly qualitative research with rigorous analytical decision support.