If you are in fact the monarch of a sovereign nation, you can indeed give companies a choice: "either design your products to automatically decrypt themselves when they enter my territory, or don't do business in my country."
Companies will then be forced to make a decision based on the market size of your country. Or they will break the law, and you will have to deal with enforcement.
Most companies would like to do business in the EU.
> Companies will then, of course, be forced to make a decision based on the market size of your country.
And as we've seen time and time again, China can get away with a lot of bullshit with demands anywhere from tech to culture (e.g. MCU films that ended up censored). At least now, Apple has woken up and begun moving off production to Vietnam, and Marvel has decided to ignore Chinese demands after all.
Companies will then be forced to make a decision based on the market size of your country. Or they will break the law, and you will have to deal with enforcement.
Most companies would like to do business in the EU.