What does the term 'interstate commerce' refer to?

The term 'interstate commerce' specifically refers to trade that occurs between states within the United States. This concept is important because it encompasses all commercial transactions that cross state borders, which are regulated by the federal government under the Commerce Clause of the U.S. Constitution. This clause grants Congress the power to regulate commerce among the states, which has been a foundational element in promoting a unified national market and preventing states from enacting protectionist measures that could inhibit trade between them.

Understanding interstate commerce is crucial as it underlines the relationship between federal and state powers, particularly in the context of economic regulation and the limits of state authority in the marketplace. The other options, such as trade between countries or trade within a single state, relate to different categories of commerce, while trade regulated solely by state governments does not accurately reflect the broader federal role in interstate commerce.