I suspect that if the EU really does implement this, the US will likely make it against US law to obey media censorship requests from other countries against speech that the First Amendment protects. They probably should have done that a little while ago (curating content under the request of a foreign government should be one of those things that revoke your Section 230 privileges), but better late than never.
Other countries dictating what can and cannot be said on US services is already a big problem, and will only get worse, and the EU's bargaining position is much weaker than China's given that the vast majority of EU citizens use US services.