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Trade is the exchange of resources between planets in an empire, or (less commonly) between an empire and the Mesophon Traders Guild NPC empire. Player empires cannot engage in trade with other player empires.
Trade is important because planet's total labor pool is reduced if they are distributing labor between multiple structures. Planets generate the most labor when they are dedicating most or all of their labor to a single structure. A robust trade network allows all planets' resource needs to be met without having to operate multiple autofac and raw material structures on every planet, which would reduce total labor output.
Resources are exchanged using trade routes. Trade routes appear as grey or red lines between planets between planets on the map. Grey lines are the player's trade routes and red lines are other empires' trade routes.
A one-way trade route is established with the “import from” button on a planet and selecting another planet within range. If this process is repeated on the target planet, the trade route will be two-way and the planets will attempt to import one anothers' resources if they are able.
The importing planet will attempt to import 100% of its demand for any resources generated by the primary structure on the exporting planet. The percent of demand to be met by any single trade route will automatically be reduced if additional trade routes are established for the same resource, to distribute demand evenly between all exporting planets. The percentage of demand to be met by the route can also be manually set by the player by clicking the center of the trade route.
A planet designated as a trading hub has a special structure called a starport that allows it to import or export any resource. Running trade routes through a trading hub means allows individual planets to only require a single two-way trade route, rather than establishing multiple trade routes to individual planets producing the needed resources. Trading hubs also allow planets to get resources from worlds that are more than 200 LY away. A disadvantage of trading hubs is that the entire economy of a region can collapse if the trading hub is conquered by an enemy.