Trade termsIt is a professional term used in international trade and understanding these terms is important for and individuals engaged in international trade. Here are some common trade terms and their interpretations:

FOB (Free on Board) – Offshore price
FOB is a price term for export goods, refers to the cost of goods that the buyer must pay after the seller has loaded the goods on board and delivered on board.FOB price includes the cost of shipping, unloading and insurance, but does not include customs and taxes.

CIF (Cost, Insurance and Freight) – Shipping costs plus insurance prices
CIF is a price clause for imported goods, referring to the sellers responsibility to transport the goods to the designated port and pay shipping and insurance fees, but excluding customs fees and taxes.

EXW (Ex Works) – Factory Delivery Price
EXW is a price term for export goods, which refers to the buyer being responsible for the transportation and insurance costs of the goods, while the seller is only required to place the goods in the factory or warehouse.

L/C – Letter of Credit
L/C is an international trade payment method, referring to a payment warranty issued by the bank on behalf of the buyer. When the seller has completed the delivery of the goods, it is possible to claim money from the buyer’s bank. This payment method can reduce the risk of confidence issues and delay in the shipment.

T/T (Telegraphic Transfer) – transmission of electricity
T/T is a bank transfer method used for international trade payments. Buyers send money to the seller’s account through the bank and generally need to provide proof documents such as goods list and contract. This payment method can quickly and safely complete the payment.

WTO (World Trade Organization) – World Trade Organization
The WTO is an organization in the field of international trade committed to promoting trade liberalization and regulation. Its member states account for about 98% of the total global economy and have developed a set of trade rules and agreements.

HS Code – Harmonized System Code
The HS code is a standard commodity classification code used to identify and distinguish different types of commodities in international trade. The coding system is developed by the WTO and consists of six digits, classified according to the different characteristics and uses of commodities.

Below are some common trade terms and their interpretations.