The Handmaid's Tale is broadly set in North America, likely in what was formerly the U.S. or Canada. The novel takes place in the near-ish future, relative to when Atwood was writing (1985). The Handmaid's Tale paints a picture of a potential dystopian future for America, should religious zealots take over the government. Ironically, the very horrors that occur in this dystopian American future are horrors the U.S. has inflicted on other countries, using its influence to prop up pro-U.S. dictators. Following in the footsteps of her predecessors within the dystopian genre, Atwood uses speculation and imagination to hold a mirror up to the face of the U.S. empire.
As a means of critique in The Handmaid's Tale, Atwood will frequently overemphasize aesthetic aspects of the setting that are typically associated with America or Christian nationalism. Take, for instance, Offred's description of the Commander's compound in Chapter 5:
The lawns are tidy, the facades are gracious, in good repair; they're like the beautiful pictures they used to print in the magazines about homes and gardens and interior decoration.
The idealized, wealthy suburban aesthetic these houses adhere to is a facade, a construction: available only to a select few with the privilege to access it. This is true in American society now; Gilead's extremity simply illuminates the real-world problem.