As an advocate (and practitioner) of European digital sovereignty, let me tell you, at least from my perspective, it has absolutely nothing to do with fear of US intelligence agencies spying on us, and everything to do with the catastrophic consequences of an unreliable and unstable American government pulling the plug on our vital infrastructure, or at least the very least weaponizing our dependency on American companies.
I live in Denmark, a country whose primary threat at the moment is the USA, and the thought of Donald Trump effectively having a kill-switch to our highly digitalized society is absolutely frightening. Reducing our dependence on American tech means that we are less vulnerable to a hostile power using it to extort us out of our territory. We cannot remove the threat entirely, but we can make the pain less extreme.
Other EU countries are also seeing things this way, that the US no longer has a stable government and is no longer a friendly country. Who cares about American spying when the real threat is your country being turned off?