A trade embargo (abbreviated TE) by one country against another is a kind of unilateral diplomatic agreement that denies the embargoed country most trade income related to the embargoing country.
Creating Trade Embargoes
A trade embargo is created by a diplomatic action between two countries. The option requires trade tech of at least level 4, and is not available if there is currently a trade agreement between them. Also, an AI country cannot embargo a country it has a truce with.
Embargoing is unilateral, and there is no chance of failure. Immediately upon imposing an embargo, the following effects apply to the country imposing it:
- relations with the target country decrease by 25 points.
- relations with all other countries of the target's state religion decrease by 10 points.
- (trade embargoes do not cost stab, although this is indicated by the ingame-text)
AIs will usually embargo countries they are at war with (if they have the tech (trade tech 4) to do it). If they are not at war, an AI will embargo a second country only after it sends a merchant to a center of trade owned by the AI country (regardless of the success or failure of the send). However, this is not automatic. Here are some factors which seem to increase the risk of being embargoed by an AI:
- the AI file (a factor determines the 'mind' of the country about embargoes)
- your badboy; the higher it is, the more likely an embargo
- sending many merchants at a time to the same CoT
- getting a monopoly in the AI's CoT
- after getting the monopoly in the AI's CoT, proceeding to compete out the remaining merchants denying them their valued trade tariffs. Bad!
Effects of Trade Embargoes
When one country has embargoed a second country (the target), the following effects apply:
- the target country cannot send any more merchants to the CoTs owned by the embargoing country.
- the target country doesn't get income for any generated trade coming from provinces controlled by the embargoing country. For example, if the embargoing country's provinces generate 25% of the trade value of a a particular CoT, the target country will only get 75% of its normal trade income from that CoT.
- in its own CoTs, the embargoing country gets the target country's share of all generated trade that is generated in provinces controlled by the embargoing country. For example, if a country is generating 200d in trade that goes to one of its own CoTs, where a targetted country has 5 merchants, then the 50d in trade that the target would otherwise get, goes instead to the embargoing country. Note that it gets this trade regardless of whether it has any merchants at all in the CoT!
- the target country gets a permanent casus belli against the embargoing country.
- the embargoing country may get a direct disinvestment to its trade tech. The amount is -1d/month for each embargo above the allowance determined by the country's mercantilism domestic policy.
- Provinces belonging to countries that are embargoed by the CoT owner may migrate to other CoTs if they are on the outer edge. They will migrate back within a month once the embargo is lifted.
- Trade embargos each cost 3% trade efficiency to the embargoer, regardless of the Mercantilism DP setting. (as of 1.09)
- In any CoT, the embargoing country's merchants will prioritize embargoed countries' merchants in bumping them out of the CoT due to competition. (perhaps someone can rephrase this)
There are only two ways for a country to get an embargo lifted. The country which imposed it may do so as a diplomatic action. (The AI only does so rarely, and only when the target has no merchants remaining in its CoT(s).)
Embargoes are also lifted automatically whenever a target country wins any war against the embargoing country. See the article on war for the exact definition of winning.