Why did the Trade Fed trust Sidious?

[FaxModem1]

Really, a man in a dark robe with a froggy voice comes to you and says he'll solve your trade problems, all you have to do is invade Naboo. Once that turns to the shitter, and your in court for 3 or 4 times, he now tells you through Dooku to leave the Republic, and declare all out war with them. WHY?

[NecronLord]

Mind powers.

[Cykeisme]

You're just focusing on the shitty parts in an attempt to paint a skewed picture.

Logically, prior to TPM, we can assume there are events that led the Trade Federation to trust Sidious.. other promises that he delievered upon. Either big promises, many promises, or both.
Fortunately, we don't have to assume. It's documented that Sidious instigated pirate attacks on Trade Federation ships in order to allow the legalization of private war droid armies of limitless size. He did this in conjunction with the constant raising of trade taxation, presumably to allow the Trade Federation a chance to defend their rights to greed satiation. And greedy they are.

Needless to say, when things "turned to the shitter", and they went through "court for 3 or 4 times", he promised them they'd get out of court just about scott free. And he delivered.

He then proceeded to provide them with a plan with which they could easily separate and even conquer a defenseless Republic with a tremendous secret military buildup of infantry, armor and starfighter droids, and a massive fleet of warships. He delivered again.
Of course, who could have foreseen that the Republic would have an army of their own? How could the Republic come up with an army so quickly? Clearly not even Sidious could have foreseen this!

I'll leave the rest of your research to you.

[Rawtooth]

There is also the not-so small matter that Gunray owed his position to Sidious.

[Lord Revan]

it should also be noted that when the Trade Federation (and the rest of the separtist) found out that Sidious was behind Dooku it was already too late to back out

[Publius]

The Trade Federation as a whole was never really under Darth Sidious's direct control. He controlled the TradeFed indirectly, through his control over the Commanding Viceroy. The Executive Board Directorate, nominally the Commanding Viceroy's superiors in the corporate chain of command, was actually populated with his cronies after Lord Sidious arranged for the assassination of the previous directors during the Eriadu Trade Summit in 3 rS (see Cloak of Deception). The vast majority of the TradeFed (including most of its corporate leaders) had no idea they were serving the Dark Lord of the Sith, in much the same way that most of the Republican Government was ignorant of their puppet strings.

As for why Nute Gunray trusted a Sith Lord, Cloak of Deception also establishes that Lord Sidious was directly responsible for Gunray's appointment as Commanding Viceroy, having arranged for "several key resource worlds to join the Trade Federation as signatory members, abdicating their representation in the Senate in exchange for lucrative trade opportunities" and creating the illusion that these negotiations were Gunray's doing. The Sith Lord had made several shows of good faith to his "partner," establishing that he did indeed have the influence to make their schemes work.

Although history shows that Gunray was suckered and that the Sith Lord's "good faith" was merely a part of an even greater plan, he did not simply do as he was told on the basis that the man wore a cloak and might have been a Sith Lord (to date, there remains very little evidence on how much about Lord Sidious he actually did know; there remains no record of him actually seeing any evidence that he was a Sith Lord).

[Darth Yoshi]

In TPM it's implied that Gunray knew Sidious was a Sith Lord (hence his "now there's two of them!" comment upon learning of Darth Maul), but you're right that we've no evidence Sidious ever actually demonstrated any Sith powers to him.

[FTeik]

There was no demonstation of Force-powers, but Cloak of Deception makes clear, that Gunray knew Sidious was a Sith.

[dworkin]

If I was a greedy merchant prince and a guy claims he'ld make me even more filthy rich and powerful I would not care about halitosis or poor dress sense. I would take his claims to belong to a society of long dead evil wizards with a grain of salt too.

After he has made me insanely rich and powerful, I probably wont care if he really is a Evil Wizard (tm). After all, I have my war fleets and battledroid army and all he has some mythical magic powers. And the Droidikas seem to be capable of dealing with Jedi.

[Kurgan]

I was a little surprised that Gunray still trusted Sideous in Episode III.

Was Dooku's private speech to Obi-Wan in AOTC all a lie then, or did Nute and Palpy make up since then?

[Lord Revan]

I was a little surprised that Gunray still trusted Sideous in Episode III.

Was Dooku's private speech to Obi-Wan in AOTC all a lie then, or did Nute and Palpy make up since then?

it was implied in either LoE or ROTS (novel), that by the time Dooku was reveal to be Sith and Sidious his master, the Trade Federation had no choice but the trust him (or be crushed by the Republic)