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The US sells software to the EU. To me is constantly amazing that US citizens and US gov thinks it can just pull the plug without consequence to itself.

You pull the plug the money stops rolling in. I don't know if you've ever tried to sell something vs buying something but buying is a ALOT easier than selling.

You can easily choose where to buy but choosing to sell is a lot trickier. Pull the plug on AI and the EU will switch to Chinese models. Trade negotiations and relations are very fragile and difficult to curate and maintain. Very easy to rip up.

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You seem to ignore the fact that changes take time.

There are entire governments in the EU with workflows built around Microsoft products that have no real 1:1 alternatives. If a governmental procedure stipulates that a ministry uses Windows w/ Office365, it uses Windows w/ Office365, no room for an argument. If anybody pulls a plug here, the consequences will be unimaginable.

It's nice that a single German state has switched to LibreOffice, but the rest of Germany, or the remaining 26 countries might take years, if not decades, to certify and permit someone else's solution.

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If the plug is fully pulled, the EU could confiscate some European Azure/Office365 servers and 'put the software on the market'. Windows is even easier, I'm sure in such a situation the EU would be happy to limit the restrictions on reverse engineering to block license verification. I'm sure that there are some hard drives on European territory with the full Windows source code as well.
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There are so many things that can happen. Since tariffs are percentual, Microsoft could lower prices to avoid that companies will migrate to European alternatives.

In an all-out economic war, anything could happen. The source code of Microsoft products probably exists somewhere in Europe (since they have European offices) and definitely binaries, since it's run on European servers. Once nobody plays by the rules anymore, all bets are off.

That said, a trade war would hurt both badly and it would be an epic fail on the side of the US administration. (Since the EU would not start such a trade war by itself.)

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