This holiday season parents will need to choose between buying American and getting the toys their kids want. According to USA Today, That's because 80% of all toys sold in the USA are made in China. Some internal toy-industry estimates show only about 10% are actually made here.

Not only are few toys made in the U.S. but the ones that are don't appeal to the typical American child. That's because 10% of toys that are U.S.-made are wooden, old-fashioned "nostalgia" toys, such as blocks or puzzles, that may not hold the interest of kids older than toddlers. As noted in my post last month, there's Slinky, the twisty-wire-walking toy from the 1950s, and some plastic toys like K'Nex construction sets.

And here's the bad news about U.S. toys -- while they're safer than those made in China, they have some problems of their own. For example, U.S.-made toys were the subject of four of the 40 toy recalls the Consumer Products Safety Commission (CPSC) announced in the 2006 fiscal year, or 10%. Chinese-made toys were the subject of 28, or 70%. The other recalls were divided among toys made elsewhere in Asia and Europe.

If you have advice for parents seeking safe American toys that their children will actually want to own, please comment below.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Every time investors turn around, things get worse at Mattel (NYSE: MAT). The Wall Street Journal (subscription required) reports that the federal Consumer Product Safety Commission requires companies to "report all claims of potentially hazardous product defects within 24 hours." Mattel apparently has not been doing that. The company took several months to review data on the nearly 18 million play sets that it recalled last month.

The CPSC says that it has had about enough of Mattel's behavior. The commissions chairperson calls Mattel's approach "fallacious and wrongheaded."

Although the commission is fairly small and cannot handle all of the cases that it should, it is astonishing that Mattel would makes its position with consumers worse by adopting a stance that might be viewed as irresponsible.

In an effort to better understand the lead-in-toys scandal, I had a chance today to talk to an industry expert on the topic. Dr. Marcia Stone holds a Ph.D. in Organic Chemistry and is Founder/President of Hybrivet Systems, a manufacturer of lead-testing equipment for industry and home use. She has worked in the lead testing field for 15 years.

I asked Dr, Stone why manufacturers would use lead paint? She explained that "Lead in paint provides a hard, glossy, pretty finish, the reason it was once used extensively in expensive housing. Leaded paint is also easy to work with and inexpensive."

What lead-containing products have you found on American shelves that consumers should be concerned about?
"The scandal over lead in children's jewelry is not over; we continue to find these products for sale," said Stone. She told me manufacturers will use a core of lead in cheap jewelry and cover it with nickel plating or paint, or use a solder containing lead in its construction. Children often chew on their jewelry, and as little as three milligrams of lead, about the size of three grains of sugar, can kill a child. Since lead has a sweet taste, the propensity for children to ingest it is even greater.

For the second time in as many weeks, Mattel Inc. (NYSE: MAT) has issued a recall of Chinese-manufactured toys thanks to the use of lead paint. If ingested, lead paint can lead to illness or developmental problems. The latest recall impacts 7.3 million play sets, including Batman action figures and the latest, disturbingly large (at least, since my childhood) incarnation of Polly Pocket dolls. Additionally, 1.5 million die-cast metal cars are going to be pulled off the shelves.

According to a statement from Nancy A. Nord, acting chairman of the Consumer Product Safety Commission: "The scope of these recalls is intentionally large to prevent any injuries from occurring."

As BloggingStocks' Brent Archer noted earlier today, it is "hard to imagine this stock going up by too much over the next few months." With 80% of all toys sold worldwide made in China, one has to wonder if this is merely the latest in a line of recalls set to come down the pipeline, but one also has to wonder if further complications are already being factored into the shares.

Maybe it's time to look under your kids' beds.

Fisher-Price, a division of toy-maker Mattel, Inc. (NYSE: MAT), is recalling nearly one million plastic pre-school toys because of unsafe levels of lead paint. The toys were painted by a Chinese vendor with whom the company has a long association.

The recall, the second-largest this year involving toys, involves 83 different products made from April 19 through July 6. Toy characters parents (and their pre-school children) will certainly recognize include Elmo, Dora the Explorer, and her pal Diego.

The U.S. Consumer Product Safety Commission has a full list of the recalled toys here.