The law, aimed at keeping lead-filled merchandise away from children, mandates that all products sold for those age 12 and younger — including clothing — be tested for lead and phthalates, which are chemicals used to make plastics more pliable. Those that haven’t been tested will be considered hazardous, regardless of whether they actually contain lead.
Effectively, what the government has done is to ensure that small producers — anyone from a single maker like Phil to a small company with small revenues — must go through the same costly testing requirements as the corporations whose shoddy practices caused the problem in the first place. Word on the virtual street is that many producers simply won't be able to afford to make and sell their toys or clothes anymore. And that you may not be able to find and buy all those gorgeous handmade kids sweaters, blankets, wood toys, felted animals... you name it.
Do a couple searches or head on over to the Handmade Toy Alliance for more information.
UPDATE: Here's a good post from Consumerist on it with a couple good links beyond...
H/T to Neatorama for catching my attention.