No they cannot, legally speaking, and companies do not want to face sanctions avoidance charges, so practically speaking no American company will touch the European model hosts either.

Sure, but if you are a business in the US, you might not be able to use it legally.

And, through the US exercising extraterritorial jurisdiction, businesses in Europe doing business with the US might not be able to use it either, for fear of reprisals. Even though the model is Chinese and hosted in Europe.

This sort of thing happens all the time, especially in the finance and defence sectors.