Templars generally start off at Inhospitable. When you trade with the Luddic Church, the Templars don't like it one bit and you will lose rep.
By the way, Templar ships are really slow. Unless Jesuits are swarming you, most of your fleet should be getting away.
Is that trading when there are Templar ships nearby, or does word just get out? As a trader, I spent a good bit of time buying food at Tartessus as per the norm, and had never seen the massive rep hits happen before. As it is, the burn rate of my fleet (I'm level 31 with the speed boosts available there) can't get above 4, and and I've never been able to outrun a Templar fleet. When they have caught me, I've issued an immediate full retreat order and the fighter wings have mostly gotten away, but the the Geminis, Princeps, Atlasses, Phaeton (with unstable injector), Rook, Valkyrie, and Ox(en) are vapor before the fighter wings even hit the exit points. I'm not super familiar with the templar ships but from looking at the screenshots in this thread I think the last group I experienced this with was a Paladin, a crusader, and 2 (3?) of the little ones that keep turning into lightning bolts briefly - Jesuits? Maybe I just somehow got incredibly lucky in the past but my reputation is at vengeful (80) with the Templar already at 31.
Do I have any options other than just deleting my character and going back to leveling by doing nothing but attacking/pursuing pirates? It's been kind of need staying below vengeful with them, but not at the cost of instantly losing everything if a templar fleet sees me.
I'll tone down the rate at which you lose rep in the next update. However, in the end, the point of the Templars is that they're threatening and make the game harder. At level 31 you're well into midgame and should probably invest in hardier escorts; the Templars aren't going to give two *** about some fighter wings. When you have an Atlas, it's generally a good idea to have a strong escort like a Dominator.
Are you using SS+, by the way?
Yeah, SS+. Which, by the way, is doubleplus good! I just wanted to try out an armed merchant fleet - Circes, Leviathans, Geminis with fighter wings, and some light warships - centurion heavy destroyers, maybe kestrels or the like - with a character maxing out logistics and tech for the "go team!" sort of feel. Try to avoid the big baddies, fight when raided, etc. It took me until level 31 to scrape up the rep and money for the fistful of Geminis and Mules, plus the captured Princeps and some nice fighter cover (TriTach claws, some Neutrino wings, and some misc. Gladius and Broadsword flights for variety) plus a handful of SCY mining/boarding destroyers. (I picked the "honest merchant" start, after all!) If the Templars are going to be going vendetta on me by that point, though, it's seems clear that's not a way the game can be played with the Templars around.
It's kind of funny because I leveled my previous character through pure combat and nothing else - lots of merciless hunting down/destroying/pursuing pirate fleets - and had worked my way up to an Onslaught and Caesar fleet backbone with a few escorts. The Templars don't mind that route though!
So is it just trading with the Luddies? Maybe I can give the honest merchant thing another shot some time.