Would you accept your own argument in relatuon to China - since they dominate production of hardware, we should adopt their top-dpwn approach to industrial policy and exploitative labour laws?
Well no, but I would argue that we don't have to since we have (collectively as the west) our own software and hardware. When we look at the aspect sold into western markets, it is not being designed and made in China it is being contracted to be built there.
I would also argue that the labour exploitation is being done by American/European companies.
The point i'm trying to make with the EU is that it doesn't but wants to extraterritorially rule other countries, with no industry knowledge or stakeholders, other than a market to sell to. Where companies exist in question, are mostly American is because their government doesn't hamper development and lets companies thrive in a reasonable way that is balanced and fair.
The EU version is quite overbudensome where the company wont easily exist in the first place and that has no impact into the labour practices to outsourced companies anyway. There are plenty of European companies that manufacture in China and exploit labour - which is a separate argument to the ability for companies to be nurtured to exist.
Maybe US economy would be healthier if you did not allow like 3 companies to buy up all the competition.