So there is some confusion about the new trade system in EU4.
Let me try to shed some light on the mechanics, how they work and give you a hint how to use them to get an advantage over your enemies.
(1) Trade Nodes and the trade network:
This is by far the most important change compared to EU3. Centers of Trade (or Trade Nodes as they are called in EU4) are no longer isolated, instead they are part of a world-wide trade network and connected with each other.
It is important to realize that trade does only flow one way in this network - the arrows in the trade map mode show you the direction. This is because the EU4 system abstracts trade as trade value (abbreviated TV from here on) instead of actual goods being moved around. Another important thing to keep in mind is that the trade network is static, so the connection between the nodes will never change and neither will the direction of the flow.
If you want an easy visualization and RL analogy, think of a river network where several streams flow into other rivers.
The trade network consists of 3 types of trade nodes:
(I) Starting nodes: These are on the upper end of the trade network and do only have outgoing connections. An example for this is the Hudson Bay node and the Beijing node.
(II) Connecting nodes: These nodes have incoming and outgoing connections. Most trade nodes fall into this category, examples would be London, Seville and Frankfurt.
(III) End nodes: These are nodes that only have incoming connections. An example would be Antwerpen and Venice.
The trade network can be modded, but you ALWAYS need starting nodes and end nodes. Creating a circular network is impossible - it will crash the game.
Each nation has a so called "Home Node", which is the trade node where the capital of that nation is located (for example: ENG -> London, FRA -> Bordeaux, POR -> Seville).
This "Home Node" is important for several reasons:
(I) A nation will always collect trade from it even without a merchant (a merchant placed will instead increase the income gained by +10%).
(II) You cannot transfer trade value in nodes that are downstream of your home node (a merchant placed will instead send trade power to the previous node).
(III) You receive some extra trade power from your capital in your home node.
(2) Trade value:
Trade value of the trade nodes is generated by provinces assigned to the trade nodes and modified by moving trade down the trade network (up to 20% increase on the moved TV per node).
Every province has a trade good (fish, wool, ivory, etc. pp.) that provides a certain trade value to the assigned trade node (with the exception of gold, which is instantly converted into income instead). The amount of TV created by the good depends on price and produced amount.
Price is calculated by the value of a good and modified by supply and demand.
To keep it simple, supply is calculated by the amount of produced units from each good, while demand is influenced by lots and lots of factors, such as buildings, stability, war and lots and lots of other things. For example, here is the influence on demand for wine:
Yeah, that's a lot of stuff, but you don't really have to know about that. If you have a keen eye you might notice that demand is calculated on province level. That means if a giant nation goes from +3 to -3 stab, it can lead to a significant drop in demand for wine and lower worldwide prices for that good. But that's already advanced trading stuff, so let me sum this up:
The important thing is that prices will fluctuate over time and some goods will become more valuable as the game progresses.
So once the game has calculated the current price of a good (shown in the tooltip of the good in the province menu), it will multiply it with a modifier called "Goods produced". This modifier is influenced by certain buildings (manufactories), country modifiers and the provincial tax income. The final result is the TV of the province that is added to the trade node.
Let me give you a small example:
(3) Trade power:
So now we know how TV is getting into the nodes. However, the whole reason of the trade system is to move TV towards your own node so you can make more profit. For this you need trade power (abbreviated TP from here on).
Trade power can be obtained by several different means:
(I) Owning provinces associated with the trade node:
Each province has a basic TP value (1.5 for coastal, 1.0 for non-coastal). This can be improved by buildings (like the marketplace), decisions (like "Make Calais the Staple Port" for ENG), local map modifiers (river estuary, important center of trade, both visible as icons in the province menu) and mercantilism (which provides a flat 2% boost to all owned provinces per 1% mercantilism). The final province value can be seen in the lower left of the province screen, just above the trade value.
(II) Sending a merchant to the trade node:
Sending a merchant gives only minimal trade power (2.0), but has other important benefits (see below).
(III) Using light ships to protect trade in the trade node:
Each light ship used to protect trade grants +3 to +6 trade power in the node it is assigned to (depending on the current model unlocked from tech). This value is modified by the maneuver value of an assigned naval leader (+5% per point) and naval maintenance for the navy (-50% at 0% upkeep, +/-0% at 100% upkeep). This means light ships can be used quite effectively to project trade power outside of your own country.
(IV) Forcing your enemies to transfer trade power to you:
By enforcing the "Transfer Trade Power" peace option during a war, you can force an enemy to cede half his trade power in all nodes where you have trade power as well.
(V) Transferring trade power upstream:
If you for have, for whatever reason, trade power in a node downstream of your home node, you will transfer some of that trade power to the next node upstream. You incur a hefty penalty for that (-80%), so it is extremely ineffective (but still better than wasting it all).
The game will then sum up your total TP in a node and modify it with the so-called "Trade Power" modifier. This modifier is influenced by a lot of different values like trade efficiency, stability, luck (only for AI nations), overextension (does not apply to your home node), prestige, NIs and so on. The result is the so-called “Current Trade Power” (CTP), which is used for calculating the final share of TV in the node.
For example:
Another important thing that you ALWAYS have to keep in mind is the fact that collecting outside your "Home Node" will result in a -50% TP penalty in that node. This is done so you cannot simply place a merchant in the Caribbean, send 300 light ships over and collect most of the income from the Americans. There are situations where collecting will work (I'll discuss them below), but keep that penalty in mind.
(4) Competition and collecting from trade:
So know we know how TV, TP and CTP are calculated, so we are ready to compete with other nations for trade.
In general, competition is a rather straightforward mechanic: All you do is add up the CTP of all nations in the node and share the TV amongst the % of trade power they have committed.
You can use a merchant to specify what should be done with your share of the TV value. You have the following options:
(I) Collect from Trade:
This can either be done via the merchant mission "Collect from Trade" or happens automatically if the trade node is the nation's home node. The share of the TV is converted into income, listed in the "trade" tab of the economy menu. If a merchant is assigned to a "Collect from Trade" mission in a home node, he boosts that nation's income from the node by +10%.
(II) Transfer Trade Power:
The merchant sends the share of the TV to the next connected downstream trade node of the nation's choise (can be selected by selecting trade map mode and clicking on the arrow button from the smaller UI elements on the trade routes next to the node). Forwarding trade increases the trade value forwarded by up to 20%, with diminishing returns for every additional merchant that is forwarding in the same direction. If the trade node is downstream of the nation's capital, the merchant will only send his trade power upstream - so NEVER assign a merchant to transfer trade power in a node downstream of your home node unless you are collecting in another node even further downstream.
(III) Do Nothing:
If the nation does not commit a merchant to the trade node, a default action is taken, depending on the position of the node relative to the nation's home node:
(a) If the trade node is the home node, the game will Collect from Trade at normal efficiency.
(b) If the trade node is upstream to the home node, the game will forward the TV to all connected downstream nodes and split it equally between all outgoing trade routes.
(c) If the trade node is downstream of the home node, the game will transfer 20% of the trade power from that node upwards to the next node that is connected with the player's home node.
For example:
Collecting from trade is modified by several factors:
(I) Your trade efficiency (+1% extra income per 1% TE, capped at +200%)
(II) Trade Income modifiers (such as from events or NIs)
(III) Using a merchant in your home node (+10%)
The income modifiers do not increase the TV you receive (trade efficiency does, as shown above), but rather the amount of ducats you make from the TV you collected.
So if France from the example above had 50% Trade Efficiency and a total of +25% trade income modifiers, they would make 80 * 1.75 = 140 ducats from the trade collected in Bordeaux.
If they would place a merchant in Bordeaux, their income would increase to 80 * 1.85 = 148 ducats (which isn't all that much, so your merchants are usually best send elsewhere).
Another important detail that is easily missed when forwarding trade is the "Trade Steering" modifier. This value is increased via NIs, country modifiers and naval tradition and bestows an extra % on your CTP when forwarding trade by default or with the "Transfer Trade Power" mission. So if England has 20% trade steering and 100 CTP in Bordeaux, forwarding trade to London will result in 120 CTP when calculating how much TV is moved towards their home node.
(5) Embargoes:
Embargoes are a quite nasty tool in EU4, but they come at a price.
First, you get a -10% trade efficiency penalty per embargo you issue, so unless you embargo a rival (which allows you to ignore the effect), you might be losing more trade income by that than gaining it (at least in the early game). Second, your enemy receives a CB against you as long as the embargo is active. This might not be too problematic in SP, but should you ever play a MP game and get backstabbed by the guy who was embargoed by you for the last 100 years, then remember that I warned you here.
When you issue an embargo, you no longer ban a nation from your trade nodes like in EU3. Instead, it is more like a global trade war against the target:
Roughly half of your CTP (I am sorry, but I don't know the exact calculation at this point) is bestowed as a negative Trade Power modifier on the target of your embargo - in each and every trade node where you have trade power.
Let me give you an example:
(6) The role of merchants and basic trade strategy:
So why are merchants so important in the new EU4 trade system?
Well, there are two missions for them: Collect from Trade and Transfer Trade Power. Collect from Trade will use your CTP in the node to convert your share of the TV into ducats. If used in your "Home Node" you receive an additional +10% increase. Transfer Trade Power will use your CTP in the node to move your share of the TV from the node to the next node downstream. If the node is connected to several other nodes downstream, you can select the direction in which you want to transfer the TV.
As noted above, it is rarely worth to use your limited amount of merchants to collect in your "Home Node" if you are a major power and collecting outside of the home node means that you suffer a severe TP penalty. However, there are still three scenarios where using this mission can be beneficial:
(I) You have provinces in a rich trade node that is downstream from your "Home Node":
France is an excellent example for this. They own provinces that are in the Antwerpen trade node, but because their "Home Node" Bordeaux upstream, they cannot move the TV there. So if they do not place a merchant in Antwerpen to collect from trade, all the TV and most of the TP from their provinces would be lost. The only alternative would be to move the capital into a province that is connected to the Antwerpen node - but this means they would have a harder time controlling the New World trade.
(II) You are completely dominating a trade node:
Let’s assume you are quick enough to secure all the Caribbean islands - well, in that case you might be better off with collecting abroad than move the trade home and compete with other nations that have provinces in your home node. As long as the other nations do not project their own trade power there (for examples via light ships based outside the Caribbean), you can safely ignore the -50% TP penalty.
(III) You control a faraway node and have no means to control the whole trade route home:
The Indian riches have to go through many, many other trade routes before they reach Europe. Along these are powerful trade nations like Oman that will try to get their share. Maybe an enemy has colonies in Africa where he redirects trade into an unwanted direction. In some cases it can be better to collect abroad instead of watching the trade route "bleed dry" on its way to Europe. Remember: Every TV you collect there is a TV less for your enemies to collect in Europe.
(IV) Your home node is in a horrible location:
Let’s say you play Sweden, your home node is the Baltic Sea and you have conquered Ceylon, Mexico or parts of China. Or you are any of the Mediterranean trade powers with a colony in the New World. There is no direct naval connection your home node, so forwarding the trade makes no sense - all you do is forwarding it into the arms of your enemies. Another case where should rather try to collect abroad than forwarding trade.
(V) Your home node has significant TV and you cannot project any TP:
If you either re-route a lot of TV to your home node - the small +10% boost might outshine the benefits from controlling another trade node, especially if you already control all mayor trade routes anyway. Minors (esp.those who are landlocked) on the other hand might simply lack any ability to project tradepower into other nodes.
In any other case, you should try to forward trade towards your "Home Node". But even the "Transfer Trade Power" mission has few things that you should keep in mind:
(I) Trade values in the nodes can fluctuate:
Many other nations will compete with each other, so the TV of nodes is in constant flux. If a big player loses his navy, the whole trade network might shift in favor of other nodes. So check the trade view from time to time to see if the TV of nodes has been altered enough to move your merchants and fleets to other locations.
(II) Influence on land trade is very limited:
You have no means to influence TP in land nodes except for provinces. So there is rarely a reason to assign merchants to landlocked trade nodes. If you are a naval power you should focus on forwarding trade where you can use your ships.
(III) Let others do the work:
There are situation where other nations, that share your home node, are forwarding trade in an important node and you have the option to push more TV from upstream into that node. It doesn't happen often, but sometimes you can actually get a substantial TV increase at home from someone who is polite enough to push trade forward from another node that you cannot influence, but that is part of the trade route home.
(IV) You do not have to control every node:
The African trade route is a prime example for this. The trade nodes of Zanzibar, Cape of Good Hope and Congo are not branching off, so the worst than can happen is that one of the African minors collects some of the trade that is pushed down this route. Unless your enemies start to collect in one of these trade nodes, so it is not necessary to place a merchant to forward trade there. In that case you will lose the up-to-20% TV bonus from forwarding trade.
(V) If you have TP in a node with several branches going downstream and you do NOT assign a merchant, you will still forward trade, but it will be split equally between all branches. So there is rarely any use to assign merchants to trade nodes that can only forward in one direction. On the other hand, it can be quite helpful to assign a merchant to centralize the TV flow in a node that has several branches, even if you have only mediocre amounts of CTP in it.
(7) Advanced trade strategy:
One problem with giving advice is the fact that the trade system in EU4 can be quite dynamic. You can't really say that there are first order strategies that play out the same in each game. So in this section I want to advertise a few advanced strategies that you might find useful:
(I) Teamwork! It works!
In the text above I always spoke as if all your trade partners are enemies. But are they really? If you ever end up in a MP game, you might as well find you in a position where you can team up with another owner of your home trade node to control strategic trade routes. Portugal and Spain can very well work together to secure their trade routes of New World goods. At the same time, maybe France and the Netherlands want to team up to steal England's share from the American east coast. Teamwork can be very powerful - do not think you have to do it all alone!
(II) Naval bases are vital:
Now that light ships project trade power, EU4 finally succeeds in making naval bases around the world more important. If you manage to take Malta as England, you can meddle in every trade node around the Mediterranean Sea. By conquering Ceylon, you may control the flow of trade goods from India to Europe. In short: If you want to play a big role in the trade game, you will need naval bases everywhere.
(III) Strategic locations:
Some trade nodes are strategic locations of utmost importance. Controlling these trade nodes can redirect vast amounts of TV. So here are some very important locations you should have an eye upon:
(a) Chesapeake Bay: This trade node does not only control the whole east coast of North America, it also has a direct connection to London, one of the most defensible trade nodes in Europe. England’s trade income depends on control of this trade node.
(b) Caribbean: This trade node controls the whole trade of Central and South America. It has a direct connection to Bordeaux and Seville, so it is of vital interest for France, Spain and Portugal. Id also has a connection to Chesapeake Bay, so watch out for the sneaky Englishman who might try to control both nodes to forward all the new world riches into his pocket.
(c) Ivory Coast: A branching node for the income of India and Brazil turns this into a key strategic location to control the final part of the Indian trade route.
(d) Gulf of Aden: A node of key interest for Mediterranean trade powers, because it is the only naval node that allows to redirect the Indian trade into the Mediterranean Sea.
(IV) Naval power is king:
I already said that naval bases are important, but I can't stress enough how powerful light ships are: They are amazing! You can easily dominate any naval trade node with them.
But keep the drawback in mind: Light ships are TERRIBLE at combat (even transports are more powerful), so build enough big ships to win a naval war against your enemy.
And do not underestimate the +100% NF limit from the Naval NI group - it can actually be MORE powerful than the trade NI group for a large nation. 300-500 extra ships equal 900-3.000 additional trade power.
In addition, every light ship on a "Protect Trade" mission grants naval tradition, which does not only passively increase your "Trade Steering", but can also be used to hire better admirals in time of war.
(V) Every ducat in your pocket is one ducat less for them:
It can sometimes be better to not maximize your own profit, but instead maximize the harm done to an enemy. Maybe you won't get much of that redirected Indian trade route yourself, but your arch-nemesis might lose a substantial amount of income. Especially true against nations that have a much higher trade income modifier than you (I am looking at you, Netherlands).
(VI) Mercantilism has no long-term disadvantage:
Unlike in EU3, mercantilism does no longer have any long-term disadvantage. Try to increase it when an event or decision gives you a feasible choise. Most mercantilism events offer a "lose mercantilism OR suffer something bad" or a "get something good OR gain mercantilism and suffer somthing bad" mindset. Pick mercantilism when you think that the price is right.
(VII) Remember trade monopolies:
Owning a significant amount of trade can grant you monopoly modifiers. These have additional effects depending on the trade goods. Especially New World trade goods can offer powerful effects for colonizing - having a monopoly of them is much more powerful than 10 additional ducats a month, so adjust your trade setup.
Annex:
(Click to enlarge)
Last Update 17.08.2013:
Added missing information about TV increase from forwarding trade.
Fixed missing info about transferring trade power from downstream nodes to another collecting downstream node.
Let me try to shed some light on the mechanics, how they work and give you a hint how to use them to get an advantage over your enemies.
(1) Trade Nodes and the trade network:
This is by far the most important change compared to EU3. Centers of Trade (or Trade Nodes as they are called in EU4) are no longer isolated, instead they are part of a world-wide trade network and connected with each other.
It is important to realize that trade does only flow one way in this network - the arrows in the trade map mode show you the direction. This is because the EU4 system abstracts trade as trade value (abbreviated TV from here on) instead of actual goods being moved around. Another important thing to keep in mind is that the trade network is static, so the connection between the nodes will never change and neither will the direction of the flow.
If you want an easy visualization and RL analogy, think of a river network where several streams flow into other rivers.
The trade network consists of 3 types of trade nodes:
(I) Starting nodes: These are on the upper end of the trade network and do only have outgoing connections. An example for this is the Hudson Bay node and the Beijing node.
(II) Connecting nodes: These nodes have incoming and outgoing connections. Most trade nodes fall into this category, examples would be London, Seville and Frankfurt.
(III) End nodes: These are nodes that only have incoming connections. An example would be Antwerpen and Venice.
The trade network can be modded, but you ALWAYS need starting nodes and end nodes. Creating a circular network is impossible - it will crash the game.
Each nation has a so called "Home Node", which is the trade node where the capital of that nation is located (for example: ENG -> London, FRA -> Bordeaux, POR -> Seville).
This "Home Node" is important for several reasons:
(I) A nation will always collect trade from it even without a merchant (a merchant placed will instead increase the income gained by +10%).
(II) You cannot transfer trade value in nodes that are downstream of your home node (a merchant placed will instead send trade power to the previous node).
(III) You receive some extra trade power from your capital in your home node.
(2) Trade value:
Trade value of the trade nodes is generated by provinces assigned to the trade nodes and modified by moving trade down the trade network (up to 20% increase on the moved TV per node).
Every province has a trade good (fish, wool, ivory, etc. pp.) that provides a certain trade value to the assigned trade node (with the exception of gold, which is instantly converted into income instead). The amount of TV created by the good depends on price and produced amount.
Price is calculated by the value of a good and modified by supply and demand.
To keep it simple, supply is calculated by the amount of produced units from each good, while demand is influenced by lots and lots of factors, such as buildings, stability, war and lots and lots of other things. For example, here is the influence on demand for wine:
Code:
demand = {
modifier = {
factor = 0.75
owner = { has_country_modifier = the_liquor_act }
}
modifier = {
factor = 0.01
religion_group = muslim
}
modifier = {
factor = 0.5
is_looted = yes
}
modifier = {
factor = 0.5
owner = { is_at_war = yes }
}
modifier = {
factor = 0
not = { controlled_by = owner }
}
modifier = {
factor = 0.9
revolt_risk = 2
}
modifier = {
factor = 0.9
revolt_risk = 5
}
modifier = {
factor = 0.9
revolt_risk = 10
}
modifier = {
factor = 0.9
owner = { not = { stability = 1 } }
}
modifier = {
factor = 0.9
owner = { not = { stability = 2 } }
}
modifier = {
factor = 0.9
owner = { not = { stability = 3 } }
}
modifier = {
factor = 1.1
owner = { stability = 1 }
}
modifier = {
factor = 1.1
owner = { stability = 2 }
}
modifier = {
factor = 1.1
owner = { stability = 3 }
}
}Yeah, that's a lot of stuff, but you don't really have to know about that. If you have a keen eye you might notice that demand is calculated on province level. That means if a giant nation goes from +3 to -3 stab, it can lead to a significant drop in demand for wine and lower worldwide prices for that good. But that's already advanced trading stuff, so let me sum this up:
The important thing is that prices will fluctuate over time and some goods will become more valuable as the game progresses.
So once the game has calculated the current price of a good (shown in the tooltip of the good in the province menu), it will multiply it with a modifier called "Goods produced". This modifier is influenced by certain buildings (manufactories), country modifiers and the provincial tax income. The final result is the TV of the province that is added to the trade node.
Let me give you a small example:
(3) Trade power:
So now we know how TV is getting into the nodes. However, the whole reason of the trade system is to move TV towards your own node so you can make more profit. For this you need trade power (abbreviated TP from here on).
Trade power can be obtained by several different means:
(I) Owning provinces associated with the trade node:
Each province has a basic TP value (1.5 for coastal, 1.0 for non-coastal). This can be improved by buildings (like the marketplace), decisions (like "Make Calais the Staple Port" for ENG), local map modifiers (river estuary, important center of trade, both visible as icons in the province menu) and mercantilism (which provides a flat 2% boost to all owned provinces per 1% mercantilism). The final province value can be seen in the lower left of the province screen, just above the trade value.
(II) Sending a merchant to the trade node:
Sending a merchant gives only minimal trade power (2.0), but has other important benefits (see below).
(III) Using light ships to protect trade in the trade node:
Each light ship used to protect trade grants +3 to +6 trade power in the node it is assigned to (depending on the current model unlocked from tech). This value is modified by the maneuver value of an assigned naval leader (+5% per point) and naval maintenance for the navy (-50% at 0% upkeep, +/-0% at 100% upkeep). This means light ships can be used quite effectively to project trade power outside of your own country.
(IV) Forcing your enemies to transfer trade power to you:
By enforcing the "Transfer Trade Power" peace option during a war, you can force an enemy to cede half his trade power in all nodes where you have trade power as well.
(V) Transferring trade power upstream:
If you for have, for whatever reason, trade power in a node downstream of your home node, you will transfer some of that trade power to the next node upstream. You incur a hefty penalty for that (-80%), so it is extremely ineffective (but still better than wasting it all).
The game will then sum up your total TP in a node and modify it with the so-called "Trade Power" modifier. This modifier is influenced by a lot of different values like trade efficiency, stability, luck (only for AI nations), overextension (does not apply to your home node), prestige, NIs and so on. The result is the so-called “Current Trade Power” (CTP), which is used for calculating the final share of TV in the node.
For example:
So as you can see, overextension is pretty deadly for trade.
Another important thing that you ALWAYS have to keep in mind is the fact that collecting outside your "Home Node" will result in a -50% TP penalty in that node. This is done so you cannot simply place a merchant in the Caribbean, send 300 light ships over and collect most of the income from the Americans. There are situations where collecting will work (I'll discuss them below), but keep that penalty in mind.
(4) Competition and collecting from trade:
So know we know how TV, TP and CTP are calculated, so we are ready to compete with other nations for trade.
In general, competition is a rather straightforward mechanic: All you do is add up the CTP of all nations in the node and share the TV amongst the % of trade power they have committed.
You can use a merchant to specify what should be done with your share of the TV value. You have the following options:
(I) Collect from Trade:
This can either be done via the merchant mission "Collect from Trade" or happens automatically if the trade node is the nation's home node. The share of the TV is converted into income, listed in the "trade" tab of the economy menu. If a merchant is assigned to a "Collect from Trade" mission in a home node, he boosts that nation's income from the node by +10%.
(II) Transfer Trade Power:
The merchant sends the share of the TV to the next connected downstream trade node of the nation's choise (can be selected by selecting trade map mode and clicking on the arrow button from the smaller UI elements on the trade routes next to the node). Forwarding trade increases the trade value forwarded by up to 20%, with diminishing returns for every additional merchant that is forwarding in the same direction. If the trade node is downstream of the nation's capital, the merchant will only send his trade power upstream - so NEVER assign a merchant to transfer trade power in a node downstream of your home node unless you are collecting in another node even further downstream.
(III) Do Nothing:
If the nation does not commit a merchant to the trade node, a default action is taken, depending on the position of the node relative to the nation's home node:
(a) If the trade node is the home node, the game will Collect from Trade at normal efficiency.
(b) If the trade node is upstream to the home node, the game will forward the TV to all connected downstream nodes and split it equally between all outgoing trade routes.
(c) If the trade node is downstream of the home node, the game will transfer 20% of the trade power from that node upwards to the next node that is connected with the player's home node.
For example:
But, of course, this is a paradox game, so it can't be that easy.
Collecting from trade is modified by several factors:
(I) Your trade efficiency (+1% extra income per 1% TE, capped at +200%)
(II) Trade Income modifiers (such as from events or NIs)
(III) Using a merchant in your home node (+10%)
The income modifiers do not increase the TV you receive (trade efficiency does, as shown above), but rather the amount of ducats you make from the TV you collected.
So if France from the example above had 50% Trade Efficiency and a total of +25% trade income modifiers, they would make 80 * 1.75 = 140 ducats from the trade collected in Bordeaux.
If they would place a merchant in Bordeaux, their income would increase to 80 * 1.85 = 148 ducats (which isn't all that much, so your merchants are usually best send elsewhere).
Another important detail that is easily missed when forwarding trade is the "Trade Steering" modifier. This value is increased via NIs, country modifiers and naval tradition and bestows an extra % on your CTP when forwarding trade by default or with the "Transfer Trade Power" mission. So if England has 20% trade steering and 100 CTP in Bordeaux, forwarding trade to London will result in 120 CTP when calculating how much TV is moved towards their home node.
(5) Embargoes:
Embargoes are a quite nasty tool in EU4, but they come at a price.
First, you get a -10% trade efficiency penalty per embargo you issue, so unless you embargo a rival (which allows you to ignore the effect), you might be losing more trade income by that than gaining it (at least in the early game). Second, your enemy receives a CB against you as long as the embargo is active. This might not be too problematic in SP, but should you ever play a MP game and get backstabbed by the guy who was embargoed by you for the last 100 years, then remember that I warned you here.
When you issue an embargo, you no longer ban a nation from your trade nodes like in EU3. Instead, it is more like a global trade war against the target:
Roughly half of your CTP (I am sorry, but I don't know the exact calculation at this point) is bestowed as a negative Trade Power modifier on the target of your embargo - in each and every trade node where you have trade power.
Let me give you an example:
(6) The role of merchants and basic trade strategy:
So why are merchants so important in the new EU4 trade system?
Well, there are two missions for them: Collect from Trade and Transfer Trade Power. Collect from Trade will use your CTP in the node to convert your share of the TV into ducats. If used in your "Home Node" you receive an additional +10% increase. Transfer Trade Power will use your CTP in the node to move your share of the TV from the node to the next node downstream. If the node is connected to several other nodes downstream, you can select the direction in which you want to transfer the TV.
As noted above, it is rarely worth to use your limited amount of merchants to collect in your "Home Node" if you are a major power and collecting outside of the home node means that you suffer a severe TP penalty. However, there are still three scenarios where using this mission can be beneficial:
(I) You have provinces in a rich trade node that is downstream from your "Home Node":
France is an excellent example for this. They own provinces that are in the Antwerpen trade node, but because their "Home Node" Bordeaux upstream, they cannot move the TV there. So if they do not place a merchant in Antwerpen to collect from trade, all the TV and most of the TP from their provinces would be lost. The only alternative would be to move the capital into a province that is connected to the Antwerpen node - but this means they would have a harder time controlling the New World trade.
(II) You are completely dominating a trade node:
Let’s assume you are quick enough to secure all the Caribbean islands - well, in that case you might be better off with collecting abroad than move the trade home and compete with other nations that have provinces in your home node. As long as the other nations do not project their own trade power there (for examples via light ships based outside the Caribbean), you can safely ignore the -50% TP penalty.
(III) You control a faraway node and have no means to control the whole trade route home:
The Indian riches have to go through many, many other trade routes before they reach Europe. Along these are powerful trade nations like Oman that will try to get their share. Maybe an enemy has colonies in Africa where he redirects trade into an unwanted direction. In some cases it can be better to collect abroad instead of watching the trade route "bleed dry" on its way to Europe. Remember: Every TV you collect there is a TV less for your enemies to collect in Europe.
(IV) Your home node is in a horrible location:
Let’s say you play Sweden, your home node is the Baltic Sea and you have conquered Ceylon, Mexico or parts of China. Or you are any of the Mediterranean trade powers with a colony in the New World. There is no direct naval connection your home node, so forwarding the trade makes no sense - all you do is forwarding it into the arms of your enemies. Another case where should rather try to collect abroad than forwarding trade.
(V) Your home node has significant TV and you cannot project any TP:
If you either re-route a lot of TV to your home node - the small +10% boost might outshine the benefits from controlling another trade node, especially if you already control all mayor trade routes anyway. Minors (esp.those who are landlocked) on the other hand might simply lack any ability to project tradepower into other nodes.
In any other case, you should try to forward trade towards your "Home Node". But even the "Transfer Trade Power" mission has few things that you should keep in mind:
(I) Trade values in the nodes can fluctuate:
Many other nations will compete with each other, so the TV of nodes is in constant flux. If a big player loses his navy, the whole trade network might shift in favor of other nodes. So check the trade view from time to time to see if the TV of nodes has been altered enough to move your merchants and fleets to other locations.
(II) Influence on land trade is very limited:
You have no means to influence TP in land nodes except for provinces. So there is rarely a reason to assign merchants to landlocked trade nodes. If you are a naval power you should focus on forwarding trade where you can use your ships.
(III) Let others do the work:
There are situation where other nations, that share your home node, are forwarding trade in an important node and you have the option to push more TV from upstream into that node. It doesn't happen often, but sometimes you can actually get a substantial TV increase at home from someone who is polite enough to push trade forward from another node that you cannot influence, but that is part of the trade route home.
(IV) You do not have to control every node:
The African trade route is a prime example for this. The trade nodes of Zanzibar, Cape of Good Hope and Congo are not branching off, so the worst than can happen is that one of the African minors collects some of the trade that is pushed down this route. Unless your enemies start to collect in one of these trade nodes, so it is not necessary to place a merchant to forward trade there. In that case you will lose the up-to-20% TV bonus from forwarding trade.
(V) If you have TP in a node with several branches going downstream and you do NOT assign a merchant, you will still forward trade, but it will be split equally between all branches. So there is rarely any use to assign merchants to trade nodes that can only forward in one direction. On the other hand, it can be quite helpful to assign a merchant to centralize the TV flow in a node that has several branches, even if you have only mediocre amounts of CTP in it.
(7) Advanced trade strategy:
One problem with giving advice is the fact that the trade system in EU4 can be quite dynamic. You can't really say that there are first order strategies that play out the same in each game. So in this section I want to advertise a few advanced strategies that you might find useful:
(I) Teamwork! It works!
In the text above I always spoke as if all your trade partners are enemies. But are they really? If you ever end up in a MP game, you might as well find you in a position where you can team up with another owner of your home trade node to control strategic trade routes. Portugal and Spain can very well work together to secure their trade routes of New World goods. At the same time, maybe France and the Netherlands want to team up to steal England's share from the American east coast. Teamwork can be very powerful - do not think you have to do it all alone!
(II) Naval bases are vital:
Now that light ships project trade power, EU4 finally succeeds in making naval bases around the world more important. If you manage to take Malta as England, you can meddle in every trade node around the Mediterranean Sea. By conquering Ceylon, you may control the flow of trade goods from India to Europe. In short: If you want to play a big role in the trade game, you will need naval bases everywhere.
(III) Strategic locations:
Some trade nodes are strategic locations of utmost importance. Controlling these trade nodes can redirect vast amounts of TV. So here are some very important locations you should have an eye upon:
(a) Chesapeake Bay: This trade node does not only control the whole east coast of North America, it also has a direct connection to London, one of the most defensible trade nodes in Europe. England’s trade income depends on control of this trade node.
(b) Caribbean: This trade node controls the whole trade of Central and South America. It has a direct connection to Bordeaux and Seville, so it is of vital interest for France, Spain and Portugal. Id also has a connection to Chesapeake Bay, so watch out for the sneaky Englishman who might try to control both nodes to forward all the new world riches into his pocket.
(c) Ivory Coast: A branching node for the income of India and Brazil turns this into a key strategic location to control the final part of the Indian trade route.
(d) Gulf of Aden: A node of key interest for Mediterranean trade powers, because it is the only naval node that allows to redirect the Indian trade into the Mediterranean Sea.
(IV) Naval power is king:
I already said that naval bases are important, but I can't stress enough how powerful light ships are: They are amazing! You can easily dominate any naval trade node with them.
But keep the drawback in mind: Light ships are TERRIBLE at combat (even transports are more powerful), so build enough big ships to win a naval war against your enemy.
And do not underestimate the +100% NF limit from the Naval NI group - it can actually be MORE powerful than the trade NI group for a large nation. 300-500 extra ships equal 900-3.000 additional trade power.
In addition, every light ship on a "Protect Trade" mission grants naval tradition, which does not only passively increase your "Trade Steering", but can also be used to hire better admirals in time of war.
(V) Every ducat in your pocket is one ducat less for them:
It can sometimes be better to not maximize your own profit, but instead maximize the harm done to an enemy. Maybe you won't get much of that redirected Indian trade route yourself, but your arch-nemesis might lose a substantial amount of income. Especially true against nations that have a much higher trade income modifier than you (I am looking at you, Netherlands).
(VI) Mercantilism has no long-term disadvantage:
Unlike in EU3, mercantilism does no longer have any long-term disadvantage. Try to increase it when an event or decision gives you a feasible choise. Most mercantilism events offer a "lose mercantilism OR suffer something bad" or a "get something good OR gain mercantilism and suffer somthing bad" mindset. Pick mercantilism when you think that the price is right.
(VII) Remember trade monopolies:
Owning a significant amount of trade can grant you monopoly modifiers. These have additional effects depending on the trade goods. Especially New World trade goods can offer powerful effects for colonizing - having a monopoly of them is much more powerful than 10 additional ducats a month, so adjust your trade setup.
Annex:
(Click to enlarge)
Last Update 17.08.2013:
Added missing information about TV increase from forwarding trade.
Fixed missing info about transferring trade power from downstream nodes to another collecting downstream node.
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