THE live cattle trade could be about to face its biggest challenge yet, as Indonesia's trade minister escalates the spying row with threats to cut imports of Australian beef cattle.

Indonesian Trade Minister Gita Wirjawan made the comments late today, after a state-owned firm last week threatened to suspend its own contracts with Australian cattle suppliers.

The move will be seen by many as an escalation of the diplomatic scandal surrounding the alleged tapping of President Susilo Bambang Yudhoyono's phone.

Mr Wirjawan told the ABC the move was either partly of mostly linked to the scandal, saying the relationship could be mended, but the spying allegations had damaged trust.

His comments follow Agriculture Minister Barnaby Joyce postponing a trade visit to Indonesia last week, a trip originally planned to include talks on the live cattle trade.