because china is a totalitarian country and the us isn't
Pretty sure US agencies have more rights to spy on not-their people, e.g., Microsoft EU customer data than Microsoft US customer data.
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.
My favorite illustration on the topic: https://pics.me.me/their-barbarous-wastes-our-blessed-homela...
This has nothing to do with totalitarian countries. Regardless of the political system, this is about a loss of control. About industrial espionage. Ask anyone who's work concerns US national security how much they trust foreign democries, like for instance France.