I've worked in places where customers (especially municipalities in Germany) have questioned the use of American hosting providers. I don't know whether it has actually prevented a deal from going through (I wasn't close enough to sales to know), but it was consistently an obstacle in some markets. This is despite everything being hosted in EU datacenters.

Isn't the reason that even if it is hosted physically in the EU, if it is an american company the data is still not safe from american spy agencies?