Abstract for: Modeling Dual Sourcing Resilience with Endogenous Tariff Burden Sharing in Supply Chains

Tariff shocks have emerged as a major source of disruption in global supply chains, functioning primarily as cost shocks rather than physical interruptions. These shocks propagate through pricing decisions and sourcing adjustments across supply chain tiers, creating complex and indirect effects on operational performance and resilience that are not adequately captured in existing modelling approaches. This study develops a system dynamics simulation model of a two-echelon manufacturer–retailer supply chain operating under dual sourcing. Tariff transmission is modeled using incidence and pass-through shares, while a dynamic sourcing allocation mechanism enables shifts toward a domestic supplier. The framework evaluates system behaviour under varying tariff levels and burden-sharing configurations. Simulation results reveal that the impact of tariff pass-through on recovery is contingent on sourcing flexibility. Without dual sourcing, higher pass-through destabilizes demand and delays recovery. With dual sourcing, however, pass-through can enhance recovery through adaptive reallocation. The findings also demonstrate non-linear effects and highlight redistribution of disruption toward the domestic supplier. The results suggest that resilience strategies do not eliminate disruptions but redistribute their effects across supply chain actors. The interaction between tariff severity, burden-sharing, and sourcing adaptation creates configuration-dependent outcomes. The study contributes a quantitative framework for understanding tariff transmission and supports strategic decision-making for resilient supply chain design under trade policy uncertainty.