That argument doesn’t make sense as it assumes the governments of the other countries are equally at odds as China is with the US.

Western Europe and US are generally wanting each other to succeed as friends and allies.

China wants the us market but also wants the US to be weaker and not pose an example as a democracy.

It also assumes a lot about level government control in each country that is highly dissimilar.

Well, there's definitely a strong argument that none of the data of EU residents can be processed in China or under Chinese jurisdiction, based on previous court rulings.

The EU has GDPR.

The US has refused to consider similar legislation but that would be a way to keep TikTok and limit data collection on US citizens and require it stay in the USA.

This is a short summary of the Schrems II decision, yes.