On the eve of holiday gift-giving, the activist group Public Citizen is warning about possible hazards from imported toys. Its report, called “Closing Santa’s Sweatshop,” maintains that U.S. trade policy and outdated consumer-safety protections expose America’s children to a flood of unsafe toys.

The report says that the United States will import $23 billion in toys—90 percent from China—this year and that imports account for 90 percent of the toys on U.S. retailers’ shelves. “Many nations producing our children’s toys have extremely lax safety standards and enforcement,” Public Citizen says. “Yet, while toy imports exploded by 562 percent from 1980 to 2008, the budget of the agency responsible for toy safety, the Consumer Product Safety Commission (CPSC), was cut by 23 percent, with staffing cut nearly 60 percent during the same period.”

The report says China this year has invoked two U.S. safety initiatives (relating to state-level bans on lead and bisphenol A in toys) as measures that China claims violate World Trade Organization rules. U.S. laws challenged at the WTO have been ruled against more than 80 percent of the time, the watchdog group says.

The report details campaign pledges on import safety made by President-elect Barack Obama and new members of Congress.

The Public Interest Research Group, known as U.S. PIRG, last month issued its annual study on toy safety, Trouble in Toyland.