In most policy areas, the Trump administration is seeking sharp 180-degree turns from Biden-era policy.

• But there is one quiet way Treasury Secretary Scott Bessent is picking up where his predecessor left off: urging China to reset its economy.

Why it matters: Behind the Trump administration's volatile tariff policy is the same frustration that simmered among Biden-era economic officials — and a continued push to get the nation to change.

• For too long, American officials believe, China has been exporting its way to growth, swamping the world with its goods in ways that have harmed domestic industries.

What they're saying: "Chinese goods are consumed in China, and then they export the excess to the rest of the world," Bessent told CNBC this week.

• Last month, Bessent said that the world's second-largest economy was "built on exporting its way out of its economic troubles."
• "China needs to change. The country knows it needs to change. Everyone knows it needs to change. And we want to help it change because we need rebalancing, too," Bessent said in a speech at the Institute of International Finance.

The big picture: In the past two decades, China's economic growth has largely been powered by its manufacturing might.

• But domestic consumption of those manufactured goods is sluggish: Its population has a significantly higher savings rate than much of the rest of the world, a result of the nation's lackluster social safety net.
• That dynamic has worsened since the pandemic and China's property crisis. Its reliance on global exports has sparked more efforts, especially from the U.S. and Europe, to choke off subsidized goods to try to shield their own industries.

Flashback: The Biden administration was adamant that China needed to reduce subsidies for heavy industry and encourage domestic demand.

• "I am particularly worried about how China's enduring macroeconomic imbalances ... will lead to significant risk to workers and businesses in the United States and the rest of the world," former Treasury Secretary Janet Yellen said in a speech in Beijing this time last year. "China is now simply too large for the rest of the world to absorb this enormous capacity."
• Yellen said that China could take steps to "boost demand ... to see a larger share of GDP approved to households to bolster their income."

Yes, but: The Biden administration used more narrowly targeted tariffs — focused on strategically significant industries like electric cars, semiconductors, and solar cells — to try to change Chinese behavior.

• The Trump administration is applying tariffs across the board.

The intrigue: Bessent said this week that the previous 145% tariff rate on Chinese goods meant that those exports originally intended for the U.S. were "going to leak to the rest of the world."

• "We don't need to tell other countries what they need to do. They are seeing this wave of Chinese goods coming to their shore. They have to find a home, and that could be at a discount price, undercutting local producers," Bessent said.

Builders are growing apprehensive that both the supply and demand sides of the housing market are facing new headwinds — and planning less construction in the months ahead.

Driving the news: Homebuilders took out permits for 1.41 million housing units in April, 4.7% below the March rate. New permits for single-family homes were down even more, off 5.1%.

• The number of housing starts ticked up 1.6%, though single-family home starts fell by 2.1%.

State of play: Survey data also points to builders becoming more pessimistic amid the trade war escalation.

• The National Association of Homebuilders index of builder confidence fell to 34 in May, from 40 in April. Numbers above 50 indicate builders are confident about the outlook.
• The survey showed that 34% of builders cut home prices in May, up from 29% in April, the highest since December 2023.

Between the lines: The policy mix in April hammered the housing industry from both sides.

• Tariffs threaten to make key inputs for homebuilding — drywall, copper pipes, concrete — more expensive. Deportations could make immigrant labor more scarce. That all creates new supply-side challenges.
• Meanwhile, higher interest rates, lower stock prices, and the risk of job losses may limit housing demand.

What they're saying: "Soft housing starts in April are another sign that builders are hitting the brakes this year in response to high uncertainty for costs and future demand," wrote Nationwide senior economist Ben Ayers.

Yes, but: It is yet to be seen whether the de-escalation of trade tensions in May, which has brought markets back and led economists to back off recession predictions, will reverse that April gloom.