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Border trade, in general, refers to the flow of goods and services across the border between different jurisdictions. In this sense, border trade is a part of the normal trade that flows through the ordinary export/import legal and logistical frameworks of nations and smaller jurisdictions. However border trade specifically refers to the increase in trade in areas where crossing borders is relatively easy and where products are significantly less expensive on one side of the border than the other – often because of significant variations in taxation levels on goods. Common items involved in border trade include alcohol, tobacco, medication, recreational drugs, automobiles, automotive fuel, groceries, furniture and clothing.
As well as border trade across land or sea borders, air travel with a low-cost carrier can be worthwhile for an international trip for the same purpose, although baggage restrictions can limit the effective savings to those for small high-value goods.
Where border trade is done for tax evasion, it forms part of the underground economy of both jurisdictions.