Yuan Action Creates Fresh China Conundrum for U.S. Treasury

China’s surprise devaluation of the yuan may make it harder for the Obama administration to balance its praise-and-prod strategy toward the world’s second-biggest economy.

About 16 hours after China cut the yuan’s value against the dollar by 1.9 percent, the U.S. Treasury issued a statement tiptoeing around the issue, saying it’s too early to judge the implications of China’s move. The People’s Bank of China called the change a one-time adjustment and said the currency’s fixing will become more aligned with supply and demand; Whitney Smith, a Treasury spokeswoman in Washington, said that “any reversal in reforms would be a troubling development.”