"If US companies didn't move offshore to take advantage of lower wages and taxes, new foreign companies would be set up."
On the face of it, that makes some sort of sense. In practice, what happens is this.
Western Company is a market leader in, say, the running shoe market. Lets call them ShoeCorp
ShoeCorp decides that they can further maximise profits by shifting their manufacturing offshore to a cheaper country who is offering tax incentives as an inducement. Lets say that this country is China.
ShoeCorp builds an impressive all bells and whistles manufacturing plant and employs the barefooted local villagers to operate it for cents per day.
A few years later, the local villagers are no longer barefooted and wages have been creeping up and the tax concession has disappeared. At the same time, another country, lets say India, has been making tax concession offers of its own, and pointing out that they still have ample supplies of barefooted villagers.
ShoeCorp considers this, and decides that all things being equal it would be more profitable to simply lock the doors to the old factory in China and build an even shinier one with even better bells and whistles in India so that is what they do.
Meanwhile, back in China there is now an empty shoe factory and a bunch of villagers who no longer have jobs. The Chinese Goverment considers this to be an unacceptable state of affairs and promptly reopens the shoe factory and re-employs the villagers who are already trained in it's operation.
Back over at ShoeCorp, their new Indian plant is churning out plenty of cheap shoes that they continue still selling at insane markup prices in order to provide the ShoeCorp executives with the level of salary plus bonus for which they have long been accustomed.
The old plant in China is also producing shoes that are virtually identical to those of ShoeCorp at a slightly higher marginal cost but the Chinese plant does not have the problem of needing to subsidise the flamboyant lifestyles of the ShoeCorp executive class or maintain their massive marketing budget, so they are able to undercut ShoeCorps products at point of retail by orders of magnitude.
ShoeCorp eventually realise that they have a problem, but what to do? Well, the obvious answer to these graduates of some blue ribbon ivy league business school is to cut costs in order to remain competitive. They then hear that the government of Vietnam is offering some pretty good tax incentives . . . .