The traders were raided at Naniqiao market, in Yulin, China.
Police temporarily barred them from selling the meat.
Dramatic video shows the irate traders plead with police not to stop them from selling the pets for food.
Their reluctance to stop selling dogs has led Chinese activists to urge animal rights campaigners to circulate the video in a bid to drum up international condemnation that will force the authorities to clampdown.
Activists need help because the police and authorities have not been able to stamp out the dog meat trade altogether.
Authorities have been slow to act even though activists often circulate images of dogs crammed into cages suffering horrendous horrors before being boiled or blow-torched for food – as blow torching the animals is said to improve their taste.
Additionally, the upcoming Yulin Dog festival next week claims up to 10,000 dog lives in the Chinese city during the mid-summer festival.
Celebrities Ricky Gervais, Simon Cowell, Matt Damon and the late Carrie Fisher have been outspoken critics of the massacre.
Despite the raid, angry dog meat vendors and the police reached a last minute compromise, allowing the vendors to continue to sell the dog meat but limit it to two dog carcasses per stand.
It is a dramatic reduction for most vendors who are unhappy at the measures and hope that it will be overhauled.
Nanqiao market attracts dog meat traders from around the country as another popular spot, Dongkou market, has become a problematic place to sell the meat.
A spokesman for Humane Society International said that its Chinese partners had swooped on traders at Nanqiao market as they were in violation of the new order.
They reported the activity to the authorities in Yulin and this was then followed by a crackdown whereby the traders were forced to close down their stands.
Yulin police department has also set up a temporary office in the main Dongkou market for daily inspections to enforce the order.
Dr Peter Li, the Humane Socirty’s China policy specialist, said: “It is encouraging to see the Yulin authorities enforcing the compromise ban that they themselves struck with Yulin officials.
“It shows that while the restricted sales order is by no means perfect, it is absolutely having an impact and Yulin law enforcement want to be seen to be taking it seriously.
“Our Chinese partners share the frustration of animal campaigners around the world that change in Yulin is a long time coming, but they are keen for this video to go viral so that people can see that progress is being made and the dog traders are definitely feeling the pressure.
“This kind of crackdown is certainly causing vendors to hold off buying more dogs, and word is spreading.”