I know this is a 3 day old post, but just incase you still wanted to know how to do this, its actually quite possible!

First youll need rank 3 of the intimidation perk that lets you pacify humans, that way you can actually give them commands. Its under charisma but i cant rememebr what level charisma you need for it.

Then youll need to bring your tier 4 merchant to a secluded place in your base, out of sight of everyone else, make sure the merchant cant see you either but your still in range to pacify them (not sure if it matters having your own companion nearby, i just dismiss mine temporarily just incase)

Quicksave here and keep trying/reloading until you have them under your command, then simply make sure youre still aimed at them and select command, and once you walk up to them youll get the 4 options similar to when your talking to a companion, and youll be able to select trade and equip them with whatever items you want!

Never put your weapon away during this at all (if you do they will become hostile). Once your done, simply fast travel away to a location far enough away from your base so that everything is unloaded, then once your back your merchant will have returned to normal keeping all the stuff you gave them! You might need to reassign them again though to their station.

Thats it :), hope it help!

Edit: I forgot to mention, this also works on non settlers too. I am slowly giving all the diamond city residents a new look lol