> Imagine if the US, behind closed doors of course, threatened to cut off all cloud services. Huge parts of the public and private sector could collapse.

I think the EU member states would declare it a matter of national emergency and nationalize the relevant assets, with every other country these American companies sell to taking notes and considering doing the same pre-emptively, providing a huge investment boost to EU tech companies (and almost certainly China) while tanking the US economy, and poisoning the ability of the Americans to sell to Europe for the next hundred years.

You don't win the opium wars by threatening to cut off the supply of opium.