It's literally only a problem because the US laws allow the US government to force MS / Google / Amazon to hand over all data stored by German companies on data residing in German datacenters located inside Germany, if an American company is running them.

That bullshit caused us a huge amount of headaches when we wanted to deploy our COVID systems to Azure...

CMEK was introduced for this. NSA can have the data but won’t ever read it

It's still not the same thing as not having that data, at all.

Once you have the encrypted data somewhere, and if you really need to, it's just a game of time. At some point the old encryption will be broken.

It doesn't matter, according to the GDPR encrypted (or hashed) personal information is personal information.

When we are talking about cloud and digital services there is nothing protectionist about it. The amount of powers all countries spy agencies have over cloud platforms is scary.