The Traders Guild is a neutral faction that deal primarily with commerce between towns. Their members are divided into two economic purposes: traders in towns or traders moving items between towns. Regardless of what purpose they are serving members of the Traders Guild are always protected by some form of armed guard.
Traders Guild will always start out neutral to the player's faction, except for the wandering trader start in which you start with a hundred reputation with the Traders Guild. If you have a shop set to public near or on a trade route members of the guild will stop by to purchase particular items from you.