Why would they have to do that? They would just have to keep the data in a country that won't be part this new legal framework.

As the article says, these plans were announced after Microsoft won a court case to prevent the US government from searching Microsoft's servers located overseas. The government's solution to this is to honor foreign warrants to search US servers, so that foreign governments will reciprocally honor US warrants to search foreign servers. This will enable the US government to get data from Microsoft's servers if they are located in any country which is part of this agreement.

So, just find a country that isn't part of this agreement, and is not likely to become part of it, and keep the data there. Amazon could open a few AWS datacenters in such countries and make a lot of money.