THIEF RIVER FALLS, Minn. – Nestled among acres of rain-soaked grain fields in rural Minnesota lies the impressive world of DigiKey. DigiKey, often referred to as the Amazon of electronic parts, operates from a single warehouse in Thief River Falls. Every day, this warehouse ships an average of 25,000 orders to customers spread across nearly every country on the globe.
Despite its success and massive impact on the region, DigiKey faces a significant challenge due to tariffs. About a quarter of the products sold by DigiKey come from China, resulting in the company spending billions of dollars on tariffs imposed during President Trump’s term. The constantly changing rules and uncertainty surrounding tariffs have put a strain on DigiKey and its employees, forcing them to navigate complex trade compliance requirements.
Founded in 1972 by Ron Stordahl, DigiKey quickly grew from a small town of 8,800 people into an employer of over 3,800 U.S. workers, constituting half of the county’s workforce. The company’s unique business model of selling electronic components in small quantities to engineers and hobbyists has propelled its success and made it an essential part of the community.
In response to the challenges posed by tariffs, DigiKey established itself as a foreign trade zone (FTZ), where some foreign products can enter duty-free, reducing the financial burden of tariffs. This strategic move has helped DigiKey save millions of dollars annually, showcasing the company’s innovative approach to overcoming external obstacles.
However, the ongoing tariff changes and restrictions on duty drawbacks have presented new hurdles for DigiKey. The company faces tough decisions about how to adapt to the evolving trade landscape, with the possibility of opening warehouses in Europe and Asia looming as a potential solution to mitigate the impact of tariffs.
As DigiKey navigates the complex world of tariffs and trade regulations, its employees work tirelessly to ensure the company’s continued success in the face of economic uncertainty and shifting global trade dynamics. With its position as a major employer and economic driver in northwest Minnesota, DigiKey remains a crucial lifeline for the region, weathering economic storms and challenges with resilience and determination.