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EU residents enjoy a right to data protection.

US residents do not.

EU allows export of their residents' personal data to the US under different sets of rules or methods, one of which is (was?) Privacy Shield. Another is Contractual Clauses. The crucial fact for Privacy Shield is it was supposed to provide "equivalent" protections (ie protection for EU data hosted in the US equivalent to that data being entirely in the EU). It did not.

My take is that Privacy Shield was a sop to the fact that the US never had anything like equivalent privacy laws, but we are (were?) too big a trading partner to apply the law to. This realpolitik appears now to be in question.

So yes, one of the ways to legally allow a US-based company to process EU resident data has now been removed.