Geography affects trade because depending on the features of the geography (enviroment), it also affects the "system" of trading and also the type and amount of supply that is coming in. It can aslo affect who you're trading with.
For an example, if your enviroment has little to no water, how will you trade by ship? You can't, so you go with a different system such as trading that substitues land.
Long answer but hope this helped :).