sMerit reduction for red trust seems like a ridiculous proposed solution from my point of view - since the merit system and the trust system are separate, and bringing in some kind of reduction of sMerit formula for red trust would likely cause more problems than it solves in terms of adding complexity and possible unintended bad player gaming consequences.
Both merit and trust systems can be abused as time goes on, abusements have been demonstrated by proofs. Nevertheless, I totally agree with JayJuanGee, those two systems should operated separately because they have very different original objectives in the forum. No need to combine them into one system.
Probably the best control is to apply some red trust in cases that are clear abuses. For cases that are not that clear... well then they won´t harm the system much, would they?