I think that you overestimate the EU reaction. Every few years we learn that our Europeans leaders and some citizens have been again spied by foreign powers, such as the US, and absolutely nothing ever happened.
A friend in the military told me years ago France was the number one hacker of the US gov. It goes both ways.
This may have shifted over time as China, Russia, NK, Iran increase their attacks, but it doesn’t diminish the fact that the EU is also hacking the US without repercussions.
The US is an ally and it is somewhat harder to punish a nation state than a company. Why would Apple take the risk? China can't exactly reveal that they are banning an American company for not spying on American citizens, and it's not clear what convincing pretext they could provide instead, so I don't think they would actually go through with a ban and Apple would probably just call their bluff.
