Unfortunately this is a faction interaction added by UWE - I thought it was just for allying with the main United Cities faction but I guess it's for the trader's guild too. I've experienced this after turning in bounties to the UC then returning to the shek kingdom. Had to send a stealthy character to turn in bounties then book it out of there until I was at 50 so the npcs literally couldn't attack me.

This is indeed an interaction and consequence of becoming allies with another faction's enemy. Distrust and outright hostility should be expected for the friends of enemies.