What does the term "interstate commerce" refer to?

The term "interstate commerce" specifically refers to trade, traffic, or transportation that crosses state lines, making it a key concept in understanding the scope of federal regulatory powers. This definition is rooted in the Commerce Clause of the U.S. Constitution, which grants Congress the authority to regulate commerce among the states. The significance of interstate commerce lies in its ability to promote a unified economic market across the nation, preventing individual states from imposing restrictive trade policies that could inhibit the flow of goods and services.

In this context, interstate commerce does not encompass all trade within a single state, nor does it limit itself to international trade. It’s also not restricted to transactions conducted solely by the federal government; rather, it covers all economic activities that go beyond state borders, thereby highlighting the interdependence of state economies. Understanding this term is crucial for grasping how federalism operates in the U.S., especially concerning the balance of power between state and federal governments in regulating economic activities.