An effective means to attack the enemy is to attack his economy. This will have longstanding effects, as demand cannot be met, and prices will increase considerably. When prices rise, and severe inflation kicks in, the enemy’s nation will struggle to cover the costs. New debt is required, increasing interest costs and lowering the enemy nation’s credit rating in the long run. With prices high, their citizens’ quality of life will deteriorate with the reduced personal wealth. Low private wealth will also lower national morale in the long run.
The same holds for the military economy. If the enemy economy struggles to support even the basic needs of their population, there will be issues with military supplies. Attacking enemy production facilities will, in the long run, create shortages, especially if the enemy cannot effectively import needed goods or if their ports are captured or blockaded.
At any time, you can see the effect on each side’s economy by opening the Strategy panel and checking the Trade Warfare line. Here, all losses to enemy military actions are listed.
There are two main means of attacking the enemy economy directly: blockades and raids.
Your fleets can be used to blockade enemy harbors. Harbors are the links to transatlantic trade to Europe and the main channel for imports and exports. Sea trade, in general, has the highest trade volumes by far, and without attacking the enemy’s tradelines, it can keep a nation running quite easily with imported goods.
All harbors within the command range of a blockading fleet will be considered blockaded. The blockade’s effectiveness depends upon the number of ships in the blockading fleet, ranging from the fleet to the harbor, blockading fleet’s commander (administration), any defending fleets near the harbor, and trade warfare subsidies. If the harbor is within combat range of the blockading fleet, the blockade will be very effective.
The harbor tooltip shows the blockade efficiency, as shown in the previous panel (blockaded by 43%). The number shown indicates the amount of trade that is reduced by the presence of the blockading fleet. In this example, only 57% of the trade-in Galveston Port is getting through the blockade.
Both sides can use the issue Letters of Marque (an Act in the Policies panel), which will allow private contractors to privateer against the enemy of the government. This is, in effect piracy, and not well-received by the European nations. With the Letters of Marque Act, the enemy will need to increase security measures, regulate trade, and escort trading fleets, similarly lowering trade efficiency as any blockade would. This affects all harbors of the enemy nation.
Another way of privateering is to use a fleet with Sea Raider’s perk. Such a fleet can blockade trade nodes directly, attacking trade along with the European shores.
Raiding with army units is another option to attack the enemy economy. Raiding units will block trade and supplies along the land routes in a similar manner to blockading fleets. In addition, the raiding unit will attack and damage any industries within its combat range. After the raid, those industries will need time and building materials to repair and continue production.
Targeting a certain production could be beneficial if a weak point in the enemy’s economy is recognized. By denying the enemy domestic production, it will need to import the goods that would have been otherwise produced. In case of the blockade, the victim nations’ economy could be greatly damaged.
Trade Warfare Subsidies and Blockade Running:
If a port is blockaded, the blockaded nation’s vessels will automatically do their best to run the blockade. Using trade warfare subsidies will make both blockades and blockade running more effective. This means that the blockading level can be increased or decreased depending on which side is issuing the subsidies and what quantity.