Re: Just ditch US products?
I don't agree that it shouldn't be used at all. The current situation should be fine (theoretically): we make legislation defining what software is and isn't allowed to do, and if they want to sell software to consumers they need to abide by those rules. Every vendor has to play by the same rules. That's how the free market works, and we need to protect free trade at any cost. If we simply ban specific software or software from specific countries, we'll keep playing banhammer whack-a-mole. (TikTok ban anyone? How long did it take for a different Chinese social media app revolving around short videos to pop up?). Of course enforcement isn't always easy, but not impossible either. (and a blanket ban won't be any easier to enforce either)
Businesses need to consider the risks for themselves, where the most important risks come down to not having control, and those are present for EU vendors too. This leaves using FOSS and "private cloud"-type situations. I reckon only large enterprises are going to consider this.
I do believe governments themselves should stop using third-party vendors in general. A lot of countries are taking steps, i believe some German councils are testing with FOSS stacks, and the Dutch government is currently building their own datacenters so they can move their cloud workloads off of Azure.