1. If the trade line with a trading partner is red, then you are not getting that income. You can verify by looking at the total trade volume in the trade tab, which will be larger than the trade income in the summary tab. The difference is the amount that would have been traded with the blockaded nation.
2. If you cancel the trade agreement, then the good will be distributed among your existing trade partners. However, the prices might go down due to oversupply of existing demand. Prior to 1.2 the trade prices were determined globally. With 1.2 they seem to be determined by your trade partners.
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