Small U.S. town, big company. Can it weather the tariff Blizzard? (Digi-Key)

10 hours ago

DigiKey, a major electronic parts distributor based in Thief River Falls, Minnesota, faces significant challenges due to U.S. tariffs on Chinese goods.
The company has spent $500 million on tariffs since 2018, with complex supply chains and changing tariff rules causing operational headaches.
DigiKey employs 3,800 people in the area, making it a critical employer in the rural community, which is also facing the loss of another major employer, Arctic Cat.
The company has established a Foreign Trade Zone (FTZ) to mitigate some tariff costs, saving tens of millions annually, but the process is cumbersome and only partially effective.
Tariffs have forced DigiKey to adapt its operations, including updating systems, training staff, and dealing with customer resistance to tariff charges.
There is concern that continued tariffs may push DigiKey to consider opening warehouses overseas, which could impact local employment and the community.
Despite the challenges, DigiKey remains committed to its roots in Thief River Falls, emphasizing its role as a key employer and economic driver in the region.

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