>>2069830
>provinces produce goods
>these goods have a value (for example let's say 1 fish costs 2 ducats)
>the trade value is calculated (1.2 fish = 1.2*2=2.4)
>this value*production efficiency/12 = production income independent of trade
>this value is added to the node that province is assigned to (for example hamburg is lubeck)
>provinces, ships, merchants, and modifiers generate trade power
>a nation's proportion of trade power = the amount of trade value they can control
>trade can be collected and then the trade value taken is multiplied by trade efficiency into income
>or steered where it is moved downstream to defined nodes and the value is multiplied by the trade value steering bonus (a little arcane but generally 4-12% and based on the number of merchants): this bonus is not the trade power steering bonus
>unused trade power automatically steers trade split between other steering merchants; if no merchants are steering then it is split equally between all downstream nodes but with no steering value bonus
>you automatically propagate some trade power upstream and can send a merchant to do this but it is pointless
>your home node automatically collects trade less a few bonuses if no merchant is present
it's simple

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How does trade actually work in eu4 under the hood?