I just don't know how this makes any meaningful difference towards the threat model of the US gov't becoming compromised if a US company still controls said servers and the CLOUD Act allows the US gov't to freely subpoena the contents of those servers. The companies involved will still do what the US says because they are forced to.

Like, the conversation will go, "Get us this data"; "EU law says we're not allowed to"; "We don't care, do it or we shut you down."