US-EU dispute over auto trade could get worse

The dispute over auto trade between the United States and the European Union is becoming more heated and uncertain. US President Donald Trump has threatened to slap additional tariffs of 25 percent on autos imported from the EU if the bloc doesn't agree to a trade agreement favorable to the US.

Although Dutch Prime Minister Mark Rutte told CNBC on Monday that there's a lot happening behind the scenes to ensure the US and the EU reach a trade deal, Bloomberg, citing a senior EU official, reported on Friday that the EU is ready to target Caterpillar and Xerox if Trump hits cars.

The war of words over the auto dispute reflects the complicated trade relations between the US and the EU, with the US administration's penchant for issuing threats to gain the upper hand in trade talks.