Basically the title.
I have seen the EU-OS/Suse discussions for some months now. However, Ubuntu/Arch/Fedora are extremely mature projects. So competing against them will be hard.
I want to know how realistic the scenario (described by the question) is.
Whether or not they are US based entities I think is moot since several developers have already been booted from kernel development due to their affiliations largely at the behest of the US.
Also if they try prevent downloads it would have the interesting side affect that: all the folks out there seeding and torrenting Linux ISOs might have to now also claim they only share the un-embargoed ones, wink.