Red Lake Nation News - Babaamaajimowinan (Telling of news in different places)

Peterson Advocacy Results in Timely Foreign Trade Zone Approval for Local Business

 

November 5, 2018



DETROIT LAKES - Last Thursday, the Department of Commerce approved Digi-Key Corporation’s application for Foreign Trade Zone (FTZ) subzone status at their Thief River Falls facility following Congressman Collin C. Peterson’s (MN-7) advocacy efforts. The application was supported by Digi-Key’s grantor, the Koochiching Economic Development Authority Board. Digi-Key ranks as the fifth largest electronic component distributor in the world, generates $2.33 billion in sales annually, and employs more than 4,000 people.

“Advocating on behalf of our rural Minnesota businesses is one of my most important responsibilities. Securing this timely and positive outcome for a bedrock manufacturing facility in northern Minnesota will benefit employees and customers alike,” Peterson said.

Rick Trontvet, Vice President of Administration for Digi-Key Corporation, said, “Congressman Collin Peterson’s letter and voice of encouragement was no doubt a critical factor in our receiving such a prompt, affirmative response from the Department of Commerce. Approval of our FTZ was an important step and gave Digi-Key another tool for mitigating the impact of the recent China tariffs on our customer base.”

Congress established Foreign Trade Zones to encourage international trade while promoting domestic manufacturing and investment. Businesses apply for FTZ status when the tariffs on imported components are higher than on finished products. Facilities that receive status approval can achieve significant savings through reduced tariff payments and customs efficiencies.

In late August, Digi-Key applied for FTZ subzone status at their Thief River Falls location in response to escalating tariffs on electrical components. Congressman Peterson wrote a letter to the Department of Commerce asking the agency to approve their application in an expedited manner. Final decisions usually take up to 90 days, but Digi-Key received their approval in about two months.

 

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