US President Donald Trump has threatened to withdraw from the World Trade Organisation "if it doesn't treat the US better", in his latest criticism of the institution.

"If they don't shape up, I would withdraw from the WTO," Mr Trump said in an interview with Bloomberg News at the White House.

Mr Trump has complained the United States is treated unfairly in global trade and has blamed the WTO for allowing that to happen.

He also warned he could take action against the global body, although he has not specified what form that could take.

Mr Trump said last month that the US was at a big disadvantage from being treated "very badly" by the WTO for many years and that the Geneva-based body needed to "change their ways".

The US has been blocking the appointment of judges to the WTO's appeals body, raising the possibility that it could cease to function.

A US withdrawal from the WTO would severely undermine the multilateral trading system that the United States helped to build after World War II.

Mr Trump has also reportedly rejected as "not good enough" a European Union proposal scrapping tariffs on cars, a move that threatens to amplify a simmering trans-Atlantic trade dispute.

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Just hours earlier, the EU Trade Commissioner Cecilia Malmstroem had said the EU was "willing to bring down ... our car tariffs to zero" provided that the US did the same.

"It's not good enough," Mr Trump said. "Their consumer habits are to buy their cars, not to buy our cars."

The White House in July sought to defuse the row when Mr Trump and European Commission President Jean-Claude Juncker met in Washington.

They pledged to work towards a limited trade accord that would eliminate customs duties, but excluded the car sector.

Mr Trump also compared the EU to China. He has reportedly threatened to place import taxes on $200 billion in Chinese goods, as a trade war escalates with Beijing.

"The European Union is almost as bad as China, just smaller," he said.

At a time when Mr Trump's protectionist policies have sparked a wave of trade wars, the institution best placed to help settle trade differences is facing a deepening crisis.