Resources to market
Depending on a country's trade law, a percentage of its domestic strategic resource production is set aside to be exported to the global market. These resources are unavailable for use by the producing country, regardless of whether trade deals have been struck for those resources or not. This mechanism is used to abstract a varying production level of resources.
If a specific resource has no buyer, then it will not be exploited and it will remain available to the market as untapped capacity; It is not possible to stockpile resources. Resources can be bought with the production capacity generated by civilian factories, meaning the resource-producing nation will receive factories in exchange for their exported resources.
This has major implications for economic strategy and military planning. Since the portion of resource production capacity devoted to export is determined by the trade laws, having the right laws in effect is critical. In an ideal world, a country keeps exactly what it needs for its own use every day and exports the excess to foreign buyers for the additional production. In practice, trade laws set a flat percentage of resources for export as well as side bonuses from trade in increased factory output, construction speed, and research speed. A closed economy has none of these bonuses, but retains all of its resources for its own production. At the other extreme, 80% of resources in a Free Trade economy are available to export. The same country might benefit from different laws at different times as production plans and needs for different resources vary.
A country can conclude a trade deal with any non-enemy country with goods available for exports. The exporter does not need to approve the deal and will not be notified that a deal has been made.
The importer will need to spend the production of at least 1 civilian factories as the cost of importing. Each civilian factory spent will allow the importation of a maximum of 8 units of a resource, if available on the market. Even if the exporting country is unable to export 8 units of a resource, then the importing country will still need to spend the full civilian factory to strike the deal for whatever is left.
When importing goods from its puppets, a country spends only 1 civilian factory per 80 units of the resource. With Together for Victory, other discounts apply to Colonies (50%) and to Dominions (25%). So one factory could buy 80 units, 16 units, and 10 units respectively in those circumstances.
The civilian factories traded for resources will be added to the total industry of the exporter, which means they will be available for construction, count for any national focus that requires a certain amount of factories and for the evaluation of economy laws.
The amount of resources a certain country may import from one country is defined by the trade-influence the would-be importer has.
One country may import the same percentage of resources the exporting country has available for export as it has trade influence compared to the total trade influence all the interested countries have together; this means that if one country has 60 trade influence, and another has 40, the earlier may import 60% of the resource the exporter has available and the latter may import 40%, then if a third country with 100 trade influence wants to import, they will be allowed to import 50% of the resource and the earlier two will now be able to import respectively only 30 and 20% of the resource.
If trade influence reaches 0, a country may no longer import resources from the country in question, but this typically only happens if either the countries are at war with each other or through a national focus to embargo a specific country.
Trade influence changes with a number of factors:
- Base value of 150
- Distance between the two countries
- Relations between the importer and the exporter
- Support (popularity) of the political party with the same ideology as the exporting country (except for non-aligned countries)
- A larger amount of divisions along a common border.
- A larger amount of ships at the exporter's coastline.
- The autonomy of a puppet.
In practice, the relative scarcity of civilian factories, the strategic importance of large resources deposits and wars in general will make trade influence mostly irrelevant for the first few years of gameplay in any scenario.
Trade by land has priority. Land trade gets used if:
- a land route that can be traced through Allied or Neutral countries - the distance between capitals is shorter than sqrt(log_n(2 + #states country A + #states country B)) * 1000 * 7.114 km
For example, land trade between Tannu Tuva (TAN) and Luxembourg (LUX) is not possible because the distance between their capitals is 9917 km which exceeds the 8765 km from the equation. Here is the math for those interested:
sqrt(log_n(2 + #states country A + #states country B)) * 1000 * 7.114 km = sqrt(log_n(2 + 1 + 1)) * 1000 * 7.114 km = sqrt(log_n(4)) * 1000 * 7.114 km = sqrt(1.38629) * 1000 * 7.114 km = 1.17741 * 1000 * 7.114 km = 8765 km
Otherwise, two (2) ports are chosen for a naval trade route. These ports are picked from the 10 ports closest to their respective capitals. These 10 closest ports then become paired combinations of source and destination ports where they are evaluated by the equation: 10 * (source port level + destination port level) - (distance in km) / 7.114 / 3 . The combination having the smallest (minimum) value establishes the sea trade route.
For example, sea trade between the Soviet Union (10 ports in range from Moscow) and Japan (7 ports in range of Tokyo) gives 70 possible routes to be considered. Most of these need to go through the Mediterranean Sea. The port at the northern edge of Northeast Siberia is the only eligible Soviet port in Asia (Vladivostok is one of the very few ports in the entire world that gets excluded). This port connects to the most northern Japanese port (Kuril Islands) which is attached to Tokyo via multiple straits. Although both ports are located in very remote areas, their states are reachable from the respective capitals.
The same methods above are used for resource transfers within a country, except that the source is the state containing the resources instead of the capital of another country.
Overseas trade requires convoys for the importing nation, which are vulnerable to enemy raiding, especially to hunting by submarines. It is possible to see the routes convoys take in the resource map mode and as such a country may use its navy to patrol sea zones the convoys have to traverse and defend their resource flow. A country with a smaller navy is better off seeking trade partners nearby to limit the amount of seazones to patrol.