Indonesia tamps down trade spat with EU over palm oil

Indonesia is backing off from threats of retaliatory tariffs on EU dairy products as it tamps down talk of a trade war with its third-largest trading partner over palm oil.

Last week, the EU slapped countervailing duties of up to 18 per cent on imports of what it claims to be subsidised biodiesel made from palm oil. That was despite warnings less than a week earlier by Indonesia's Trade Minister Enggartiasto Lukita that in such an event, he would recommend tariffs of up to 25 per cent on EU dairy products.