The aftermath of the pandemic on the global economy is not merely a temporary disruption but is fundamentally transforming the way industries operate. In particular, the accelerating fundamental realignment of global supply chains is significantly altering economic policies and corporate strategies in various countries. In the early stages of the pandemic, logistics delays and raw material shortages made the world acutely aware of the vulnerabilities of the efficiency-driven 'Just-in-Time' approach. This prompted a gradual shift towards a 'Just-in-Case' strategy, emphasizing stability and resilience. Professor Carmen Reinhart, former Chief Economist of the World Bank, analyzed the core of these changes in her Project Syndicate column, 'A Fragmenting Global Economy: The New Supply Chain Order,' highlighting the prominent features of the new global supply chain paradigm. Professor Reinhart diagnoses that the efficiency-centric Just-in-Time strategy has proven vulnerable to geopolitical risks and economic security issues, making an inevitable transition to a Just-in-Case strategy that prioritizes resilience and reliability. She specifically mentioned the trend of 'friend-shoring,' predicting that cooperation networks among countries sharing similar values will become a crucial pillar of the global economy moving forward. Amid escalating geopolitical uncertainties such as the US-China conflict and the Russia-Ukraine war, these changes warrant attention as they could profoundly impact the South Korean economy. South Korea is a nation with a high dependency on foreign trade globally. According to Bank of Korea statistics, as of 2025, South Korea's total exports and imports accounted for approximately 85% of its Gross Domestic Product (GDP), indicating that the very structure of its economy is closely tied to the stability of global supply chains. In particular, with key industries such as semiconductors, batteries, and automobiles accounting for over 60% of total exports, sensitivity to supply chain changes is further heightened. Conversely, technological decoupling due to the US-China conflict and the fragmentation of the global economy necessitate that countries like South Korea re-evaluate their existing production and export strategies. Many experts argue that South Korea must consider a multifaceted approach to building stable supply chains, based on new geopolitical trends. Indeed, friend-shoring is a phenomenon where geopolitical shifts and economic security issues are intricately intertwined. Following the pandemic, the United States shifted its policy towards strengthening domestic production and cooperation centered on allied nations to address supply chain vulnerabilities. The Inflation Reduction Act (IRA), passed in August 2022, and the CHIPS and Science Act, enacted in July 2022, are prime examples of this transition. In the context of intensifying competition with China, the advanced technology sector particularly exemplifies this trend. For instance, while the US offers substantial incentives to attract semiconductor and battery production domestically, it often emphasizes the need for strategic cooperation with allied nations like South Korea. Samsung Electronics proceeded with the construction of a semiconductor factory worth approximately $17 billion in Taylor, Texas, from 2022 to 2024, and announced an additional $20 billion investment in 2025. SK Hynix also actively responded to the friend-shoring trend by unveiling plans for a $3.9 billion advanced packaging plant in Indiana in 2025. **Impact of Friend-shoring on the Korean Economy** However, friend-shoring policies also have drawbacks. In the previous era of globalization, which prioritized efficiency, South Korea benefited from cost reductions and market expansion. However, excluding certain countries or restricting trading partners for geopolitical reasons is likely to lead to increased costs and new trade barriers. According to a report published by the Korea Chamber of Commerce and Industry in September 2025, the estimated increase in production costs due to supply chain realignment averages 15-25%. Furthermore, South Korea maintains close economic ties with both China and the United States, making it difficult to choose one over the other. As of 2025, China is South Korea's largest trading partner, accounting for 21.3% of total trade, with the United States ranking second at 15.8%. Stephen Roach, a Senior Fellow at Yale University, pointed out this difficulty in an October 2025 Financial Times op-ed, stating, "Middle countries like South Korea will have to maximize their diplomatic flexibility in a polarized economic environment." Accordingly, South Korean policymakers need to focus on building diversified supply chains in key industries such as technology and energy. In June 2024, the Ministry of Trade, Industry and Energy announced its 'Supply Chain Stabilization Strategy,' pursuing strategic diversification policies to strengthen the
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