# Difference between revisions of "Trade strategy"

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This is a guide to help improve understanding of trading in EU4.

## Producing trade value

Trade value is the sum of locally produced goods and the inputs from trade nodes flowing in (upstream), and minus the value forwarded to other trade nodes (downstream). To increase the trade value of a node a player can:

• Increase goods produced, by:
• developing base production in owned provinces;
• building manufactories and furnaces;
• giving provinces to trade companies;
• accumulating positive goods produced modifiers, e.g. Plutocratic ideas;
• increase the amount of trade flowing in from upstream through trade steering towards it or again through increasing goods produced upstream; or
• decrease the amount of trade flowing out downstream, by far the hardest to accomplish.

Because merchants increase trade steered out of a node, by far the most lucrative method of increasing trade is to place merchants in a chain of controlled nodes so that each merchant compounds the value of trade it passes on to the next.

## Controlling trade nodes

### Trade power share

Control of a trade node is dictated by a country's Trade Power share in that node. Thus, to control a desired node, a country should increase its Trade Power share in that node. Merchants only provide a token amount of Trade Power, and sending power upstream is extremely inefficient due to the -80% penalty (stacks multiplicatively, not additively, with other modifiers) for doing so. Thus, Trade Power largely comes from provinces and Light Ships. Effective ways on increasing one's share of Trade Power in a node therefore include:

• Sending Light Ships to that node and sinking the Light Ships of other countries.
• Constructing trade buildings in important centers of trade in that node. Since several buildings give a percentage increase to trade power, provinces with base increases from estuaries or centers of trade will benefit more .
• Conquering provinces in that node. If the node still has un-colonized provinces, colonization is an alternative.
• Embargoing other countries at that node.

Countries with low Trade Power share in a node benefit more from increasing their own Trade Power there than reducing the Trade Power of other countries. Likewise, countries with high Trade Power share in a node benefit more from reducing the Trade Power share of other countries than increasing their own Trade Power, although it is important to note that highly monopolized trade nodes increases the privateer efficiency, adding the need to hunt pirates to avoid losing power and money; Conquering provinces is an attractive option to increase the trade power as it allows a country to do both (increasing their own Trade Power and reducing the Trade Power of other countries) at the same time.

### Desirable trade nodes

Desirable trade nodes to control include:

• Nodes with high Trade Value, whether from local production or from upstream nodes.
• Nodes with less competition from other countries, so that fewer resources need be expended to control the node.
• Nodes connected closely with other controlled nodes, to take maximum advantage of boost.
• End nodes, from which no money can be steered.
• Nodes downstream from the trade capital.
• The trade capital's node, where Trade Power is more effective.

Trade nodes that are critical to the global network include:

• Gulf of Aden is a bottleneck for nearly all seabound trade from India and China to Europe. It determines whether trade flows to Alexandria and the Mediterranean, to Hormuz and the Middle East, or around Africa to the Americas and western Europe. (Indus is also important, since there's a link to Hormuz, but less so for European powers since value from there finds its way to the Mediterranean by a much shorter route.)
• Ivory Coast controls whether Asian and African trade flows to the Americas, to Tunisia, or to the various European nodes (Seville, Bordeaux, or the English Channel).
• Trade from the Americas collects primarily on the East coast; the best node to focus on is the Caribbean. From there, trade can end up in Sevilla (from the Caribbean directly), Bordeaux (from the Caribbean and Gulf of St. Lawrence), the English Channel (from Chesapeake Bay), or the North Sea/Denmark (from the Gulf of St. Lawrence).
• Though there are no end nodes in East Asia, almost all of the trade can be funneled into either Beijing in the north or Malacca in the south, and then routed from there to one's main trade port. Alternatively, Asian and Indian countries with strong navies and trade steering may be able to push trade across the Indian Ocean to Zanzibar and collect trade there, eventually steering trade south from the Gulf of Aden as well.
• Central Asian countries can use inland trading bonuses to earn a sizeable income from the paths of the Silk Road, pushing trade from Central China and the Asian Steppes through Samarkand to Persia.

### Embargoing

• It is rarely worth embargoing a country that is not a rival:
• Given that the attacker is willing to embargo the defender, they probably don't care about the diplomatic penalty for declaring rivals either.
• The Trade Efficiency penalty for embargoing without declaring a rival is only worth it if the defender is a serious enough competitor to the attacker. But any such competitor is probably worth declaring as a rival anyhow, assuming they are a valid rival.
• Embargoing a rival grants Power Projection, while embargoing other countries does not.
• Embargoes are most effective when:
• The attacker already has a large but not overwhelming Trade Power share in the trade node(s)—about 50 to 80% before the embargo is best.
• The defender has most or all of the remaining Trade Power share. As embargoes give a penalty to Trade Efficiency and the number or rivals is limited, only a few countries can be efficiently embargoed at a time.
• The maximum absolute increase in Trade Power share at the base Embargo Efficiency is achieved when the attacker has a 65.4% share before the embargo. In this case, embargoing all of the other countries at that trade node increases the Trade Power share by 8.3% to 73.7%.
• Countries with the largest Trade Power share that are performing a competing action should be targeted first—this removes the largest portion of competing Trade Power.
• If collecting, all other countries are competing.
• If pulling trade or steering, all countries that are collecting or steering in an undesired direction are competing.
• It is important to note, however, that embargoes are global. Be sure to check all of the relevant trade nodes before choosing whether or not to embargo a country, as countries which have shared interests in one node may have competing interests in another.

## Distributing merchants

Merchants are best sent where their country controls the most Trade Power, since the amount of income (when collecting) or steered trade (when steering) is proportional to the Trade Power controlled.

### Collecting trade in capital

The capital trade node (or main trade port, with Wealth of Nations) collects trade automatically, regardless whether a merchant is active there or not. Sending a merchant to collect in the capital merely adds an additional +10%Trade Income to that specific capital trade node, which is a bonus not granted to other nodes when collecting. Collecting in the capital is generally only worth it for countries that have Trade Power concentrated in fewer trade nodes than they have Merchants.

Stationing a Merchant in the capital increases the income there by 10%, whereas collecting with a Merchant in another node halves the Trade Power. Thus, in most cases a country would have to control more than five times as much Trade Value in the capital as another node to justify stationing a Merchant in the capital. For instance: If a country has 10 ducats worth of Trade Value in their main trade node and 2 ducats in another node, stationing a Merchant in their home node would increase their income by 10% to 11ducats, while stationing that same merchant in the other node would add 1 ducat to the 10 they're getting from their main trade port, giving them a total of 11 as well.

### Where to steer trade

Merchants set to steer trade have two effects; these will determine whether it is worth using a merchant to steer trade at a particular node.

• Steering Merchants determine which direction trade leaves a node. If a node only has one outgoing link, or trade is already being steered in a favorable direction, then a Merchant is not necessary, though increasing Trade Power can increase the proportion of Trade Value pulled forward.
• Light Ships can only be sent to nodes where the country already has Trade Power; however, a country with no Trade Power in a node can send a Merchant there, then follow up with Light Ships.
• Using Merchants to boost is generally better done:
• Near the end of a controlled chain of nodes, since this is where the amount of Trade Value to be boosted is often greatest.
• Where there are not already other Merchants boosting trade, since each Merchant increases boost by less than the last.

### Collecting versus steering

Ultimately, Trade Value has to be collected to be of any use. In most cases, it is better for a country to collect and gain 100% of their controlled Trade Value in a node than to send it downstream to somewhere that other countries will take a cut out of it. However, if a country dominates the downstream node as well, the boost for steering trade can result in a net benefit. Therefore, some rules of thumb for collecting versus steering at a trade node are:

• If a country has no Merchants or capital downstream of the node, they should collect on that node---transferring Trade Power upstream is extremely inefficient.
• If a country dominates trade downstream of the node all the way to a collector, then the boost may outweigh the cut taken by other countries along the way, and steering trade may be a good idea. As of Patch 1.2, the boost is relatively small, so near-complete dominance is required to make steering the better choice.
• If a country has enough Merchants and controls multiple trade nodes, it is advisable not to steer directly to the trade capital, but to make the money pass through as many other nodes as possible, since it multiplies the amount of money by passing through a node.

## Moving the Trade Capital

It is advisable that a country moves its trade capital to an end-node (from which no money can be steered) over the course of the game. The end nodes available in the game are:

• Genoa
• English Channel
• Venice

To be able to move its trade capital, a country must spend 200 diplomatic power. It is recommended that the player expands towards one of these wealthier nodes through the course of the game, and to make sure they have at least one center of trade in said node and enough light ships to be able to protect trade effectively against other powers in the area.

## Marginals

The marginal trade power share with respect to trade power in a node is

For example, if a country controls 25% of a trade node that has 150 total trade power, the marginal increase in trade power share per trade power is (1 - 0.25) / 150 = 0.5%. Keep in mind that own trade power refers to the net trade power, not base trade power, and is affected by e.g. Trade Efficiency and the halving for collecting outside the capital.

### Collecting

If collecting, the marginal revenue collected (i.e. actual ducats) is

"Trade value" is the sum of incoming and local trade value.

For example, if a country is collecting in its capital's trade node, the change in actual ducats generated per unit of trade power would be calculated as follows:

 total trade power = Ptotal = 150
net trade power after modifiers = POwn_net = 37.5
net trade power share = POwn_share = POwn_net /Ptotal = .25
incoming trade value = Vincoming = 5
local trade value = Vlocal = 5
trade value = Vtotal = Vlocal+Vincoming = 5+5 = 10
trade revenue modifiers = rmodifiers = 0
trade revenue = R

d(R)/d(POwn_net) = (100% + rmodifiers) * Vtotal * (1 - POwn_share) / Ptotal
d(R)/d(POwn_net) = (100% + 0) * 10 * (1 - .25) / 150
d(R)/d(POwn_net) = .05


This country would gain .05 ducats more each month if it added 1 trade power. If it added 100 trade power, the marginal change for another 1 trade power would be .018 ducats.

 d(R)/d(POwn_net) = (100% + rmodifiers) * Vtotal * (1 - POwn_share) / Ptotal
d(R)/d(POwn_net) = (100% + 0) * 10 * (1 - (37.5+100)/250) / (150+100)
d(R)/d(POwn_net) = (100% + 0) * 10 * (1 - .55) / 250
d(R)/d(POwn_net) = .018


### Forwarding

(Discrepancy between this section and previous correct information in the wiki: If a nation is not collecting in a node, nor any node downstream, even through multiple hops, then it is not eligible to influence trade value in this node. The nation's share of trade value is then redistributed among nations that are eligible. Thus trade power of the nation in this node is effectively wasted.)

Note that there is a difference between forwarding and steering power. Forwarding power is the total power of all nations not collecting in a node and determines how much total trade value is forwarded as opposed to retained. Only nations with a Merchant at a node have steering power.

The marginal steered value (in a particular direction) is determined as a share of the forwarded value and power. Merchant boost is also applied here.

Each nation that is not collecting at the node has only forwarding power. In this case, the effect on total steered value in any direction from base power is:

Each nation with a (non-collecting) merchant at the node has both forwarding and steering power. The effect on total steered value in the desired direction from base power is then:

## Trade goods

• All of the value gained from improving trade good production will come from higher provincial production value income and the larger trade value in trade nodes.
• Building a manufactory is the primary method to increase the amount of trade goods produced in a province (equivalent to improving production development by 5).
• Manufactories should be prioritized in provinces with more valuable trade goods, then in provinces that help capture production leader or trading in bonuses.
• The Trade Company investments Broker's Office and Broker's Exchange will increase the trade good production of an entire state whether the player owns all the provinces or not (must own one), thus increasing the trade value of the node at the trade off of giving higher production income to the province owner(s).
• Increasing the amount of trade goods produced will also increase the total trade value of the province's trade node. It may be worth prioritizing building manufactories in provinces of trade nodes that the player monopolizes or has a preponderance of trade power in.
• The "trading in" bonus from controlling a 18% trade share in a certain good ranges from entirely useless (dyes' +33% heir chance if playing as any denomination of Islam, a republic, or a theocracy) to potentially game-changing (ivory's +2 to diplomatic reputation). It may be worth using these as a reference for where to expand, and in some cases, they may even make low-income goods more desirable than high-income ones. Plan accordingly.
• Note that one doesn't actually need to control the production of a good to obtain the "trading in" bonus; what's more important is having high trade power in nodes where the good is produced.

### European trade goods

The best European trade goods are cloth, copper (early- to mid-game) and iron (mid- to late-game). Due to price events cloth gets +35% price and iron gets +50% by endgame. Copper also has +50% price between military tech 7 and 18, and remains at +15% afterwards. It is wise to prioritize building production buildings and manufactories on provinces producing iron, copper and cloth, and to avoid building them in provinces that produce wool, fish and grain. By late-game the price of wool and fish will decline by up to -30% and -20%, respectively. Salt is also relatively valuable to begin with, and increases by +10% about midway through the game. In a long run, mostly if planning to colonize North America, fur is going to get massive bonuses.

### Colonial and Asian trade goods

Silk, ivory, cocoa, dyes, sugar, cotton, coffee, and tobacco are the best trade goods as they have price-increasing events that boost their prices further at different points throughout the game. Dyes start with relatively high price and gets +25% price increase mid-game, but will likely drop back to its normal value around 1700 when the "Dye Plantations of Bengal" event fires. Spices and chinaware both get +50% price increases mid-game, but decrease by -40% and -50% respectively later on.

## See also

 Concepts Buildings • Colonization • Trade • Trade goods • Trade nodes • Trade company • Tariffs • Development • Tax • Production • Overextension • War exhaustion