Small U.S. town, big company. Can it weather the tariff Blizzard? (Digi-Key) (2025)

I've only seen a small portion of the chaos from my side of the market, but that's been chaotic enough.

All of this chaos has actually slowed down our US manufacturing buildout. We'd like to build US factories, but we're having to slow them because of the uncertainty. A foreign factory only has the uncertainty on the US import/export, while a US factory has uncertainty on all imports/exports.

As someone who builds apps with zero marginal distribution costs, the sheer friction of hardware logistics is terrifying. Digi-Key basically operates as a massive physical API for components, but unlike pulling a package from NPM, an arbitrary tariff can instantly invert their unit economics. It really puts indie developer complaints about Apple's platform cut into perspective when physical supply chains are this vulnerable to sudden geopolitical tax shocks.

It seems that no one ever mentions that every dollar given up to tariffs is that much less for growing staff, equipment, facility and R&D expansion. It's literally a drag on the entire GDP and ecomomic growth.

More subtle is that every dollar saved in buying components from China is more money for all of the forementioned.

It's hard to overstate how screwed hardware design and prototyping would be if companies like digi-key went under. There's only a few electronics distributors like them around and most of them are centered in the US.

When I order from Mouser (a Digi-key competitor based in Dallas) they plainly charge a 10-15% tariff fee. I'm struggling to understand why this solution isn't obvious. You have to pass the cost onto the consumer, or your margins dwindle. It's trivial math.

> People are also having to intervene in once-automated tasks. Thousands of orders that used to auto-flow directly to the warehouse floor for same-day shipping now often miscalculate tariff costs.

Charge a blanket tariff fee like Mouser.

Should note that this article is from April 2025. Digikey sruvives and the tariffs are supposed to be refunded.

Does North America have some supply of those electronics components, or are we totally depending on Asian producers? I assume if prices hike up it will improve local production — or it was suggested since the introduction of more tariffs.