Let's be real, no Western country is banning Chinese products or services because China is spying on their own citizens or abusing Uyghurs. That's at best the "feel good" story sold in the media to get the people's support and distract from other issues. They're banning them for 2 reasons. One is that China will abuse them to spy and get a competitive advantage over those other countries. The second is that it's hard to compete in price so local alternatives are pushed out.
In the same vein the EU isn't blocking a US company from collecting data because the US is spying on its own citizens and abusing people of color. They're doing it for almost the same 2 reasons. Everyone knows (with evidence) that the US will abuse them to spy and get a competitive advantage. The second is that it's hard to compete in performance/features so local alternatives are pushed out.
The only reason to see a difference here is nationalistic bias. And that's fair enough, most people aren't educated enough (not talking just academic degrees) to be capable of critical thinking when their own principles or morals are under attack. They will just go to the first easy, "feel good" explanation when they do something to others, and the opposite when others do something to them.
Pretty sure US agencies have more rights to spy on not-their people, e.g., Microsoft EU customer data than Microsoft US customer data.