In short, President George W. Bush signed, in 2008, a regulation called CPSIA (Child Protection Safety Improvement Act) in response to something horrible that happened with Mattel. President Obama kept it, allowing it to go into effect August 11, 2010.
This regulation made the cost of testing too expensive for products with a lot of components. It was applied to all products marketed to a child age twelve and under, and made anywhere in the world…including your own sewing room.
Normally in the history of the toy business, it was around $400.00 at most to completely test a toy. Now with this regulation each color change, thread change, component change was charged a $300.00 fee. This was an end-component test on every batch of every style. As an example, my sew-in leg label had three colors. This made it a $900.00 fee added to each batch of animals every time they were produced. It was simply too expensive, and causing too much needless costs to be added to a product for most entrepreneurial companies. This regulation also caused insurance to dramatically go up, if almost impossible to get.
Here’s as article in the NY Times.