The following is taken from my e-mail correspondence with a well-known consumer activist. Given her legal background, the most difficult concept for her is that conventional litigation will be of no use in this matter.
1. There is no American manufacturer of tainted and corrosive drywall. Sadly, much time was wasted by Florida homeowner Brenda Brincku in her misguided litigation crusade against National Gypsum.
National took samples of EVERY piece of drywall in her house, and ran chamber tests on them (costing about $800 per sample) and there are probably 150-200 sheets of drywall in her home. As it turned out, there were no elevated sulfide levels on any of them. I was shown all the samples by Craig Weisbruch, VP of National, and was given a free rein tour of their Florida manufacturing facility.
Extensive forensic analysis has indicated that the Brincku's corrosion problems derive from sulfur-contaminated ground water by their home—and this is not uncommon in Florida.
Essentially all copycat litigation against National has been thrown out of court.
2. As discussed, there is no possibility of any legal remedy, since—as you said—the true defendant is the Chinese government. In fact, the Chinese were unwilling to even cooperate with the US Consumer Product Safety Commission, and a fight actually broke out in China when a CPSC official tried to grab a sample of tainted board that he saw in a Chinese factory.
Moreover, even the most basic questions went unanswered. The most obvious of which is this: What changed in their manufacturing process between 2005 and 2009? By 2009, board coming from the previously worst factory in China had significantly lower sulfide emissions. The Chinese refused to answer even this.
3. As to a cover-up, one does exist, but not for the obvious reasons alone. Now, I'm speaking as a sort of DC insider...
There have been many defective and dangerous products coming from China. This—all by itself—is a serious indictment of the "Close all domestic manufacturing industry so we can eliminate pollution" policy in place for the last 20 years. In fact, pollution has been imported from China, and jobs have been exported.
The failure of agencies like CPSC to act on Chinese drywall and several other matters puts to the lie the notion that our Federal government is protecting us. This epic failure is only underscored by the sensational recent failures of the FDA.
It may be difficult to cover up when FDA approved drugs like Avandia must be taken off the market, but it's easy enough for those still sympathetic to the notion of an all-powerful federal government to downplay Chinese drywall. Besides, in this case, we have the wrong victim group: Middle-class white people.
4. The only solution is for the lenders to be forced to extend the mortgages of these people—wrapping into them the cost of remediating their homes. After all, this is the least that the banks can do after having been propped up again and again by the Feds.