Tensions over tariffs and pacts like the North American Free Trade Agreement have dominated recent economic headlines, but Thursday’s triple-whammy of cyber hacking news gives justified prominence to what may be an even bigger threat to global prosperity.
Cyber crime costs the world almost $600 billion annually, according to a report published earlier this year by the think tank Center for Strategic and International Studies and the cyber security company McAfee. That’s a potential hole of around 0.7 percent in global gross domestic product, as measured by the International Monetary Fund.
The I.M.F. said in July that the emergence of a trade war could dent world output by 0.5 percent by 2020. That’s a big concern, but at under $450 billion — calculated by simply translating the total estimated shortfall into dollars — not as large as the annual impact of cyber crime.
Investors and companies are aware of both risks. They rank trade-related factors and cyber threats among their top worries, according to surveys by the professional services PricewaterhouseCoopers. But tit-for-tat political rhetoric and tariffs, along with tales of dairy farmers’ personal struggles with trade barriers, often make bigger headlines than stories about the nefarious manipulation of computer software.
It is relatively easy, however, to grasp the implications of Bloomberg Businessweek’s investigation into alleged Chinese government interference in the manufacture of cloud-storage hardware used by American giants like Apple and Amazon. It’s also possible to relate to Britain and the Netherlands going after Moscow for trying to hack a multilateral chemical-weapons-monitoring body — especially after the dramatic poisoning of a former double agent in Britain. The same goes for the United States Department of Justice indicting Russian military personnel for cyber intrusions that affected sports-doping watchdogs.
In a speech on Thursday, Vice President Mike Pence took aim at Beijing’s various efforts to advance its interests at the expense of Washington’s, from domestic policy to cyber crime and propaganda. Of course, the United States and its allies also participate in cyber offensives aimed the other way.
With all this publicity, though, at least investors can’t claim they weren’t warned.