It all came to our attention in 2007 when large numbers of children's products manufactured in China were found to contain the poison. Then Congress created the Consumer Products Safety Improvement Act (CPSIA), established August 2008. The revision to the Consumer Products Safety Act required all children's items to be tested for led before they could be sold.
I would tell you the story myself, but I think this article, The Risk of Avoiding it all, by Lenore Skenazy, explains replications of the CPSIA beautifully.
The Act requires the certification and labeling of items, not just toys, intended for children 12 years old and less. For small businesses it's a costly burden that could range from $300 - $4000, and will most likely cause a lot of shops who create handmade products to close.
There is a movement to Help Save Handmade products and progress is slowly coming. This week the Consumer Product Safety Commission has exempted yarn from CPSIA. This is good news indeed for the hand-knitting industry.