It is illegal to "manufacture or sell" armor piercing ammunition (Yes, I am refering to the "Pistol Caliber" ammunition as described in your post.) But, you may possess it and legally shoot it out of a firearm depending on state and local laws.
I know, and work with guys that have thousands upon thousands of rounds of .308 AP ammunition. Specifically, the M2 AP rounds.
BTW- you bring up a very, very good point. There is no regulation on rifle caliber (meaning no able to be used in a handgun) AP ammunition. You can get .30 caliber AP in .300 WM and .338 Lapua, and .50 BMG among other calibers easily.
Mike
Plus, FMJ is a cheap ammo good for target practice in preparation for hunting season.
No need not to prohibit use of FMJ, claiming its AP, because its useful for punching holes in paper.
Besides, there's that ol' slippery slope argument - give an inch today, give a foot tomorrow.
On another note, here's some recent links at NRA-ILA about CPSC and gun issues:
BB Guns & Gun Control ABCs By James O.E. Norell
[The Consumer Product Safety Commission`s lawsuit to force a BB gun recall is reason to revisit why Congress voted overwhelmingly to exempt firearms and ammunition from the CPSC`s purview... The Consumer Product Safety Commission`s lawsuit to force a BB gun recall is reason to revisit why Congress voted overwhelmingly to exempt firearms and ammunition from the CPSC`s purview...]
http://www.nraila.org/Issues/Articles/Read.aspx?ID=86
Clinton Appointee Ignores The Facts—Initiates BB Gun Recall
[On Tuesday, outgoing Consumer Product Safety Commission (CPSC) Chairman Ann Brown, a Clinton appointee who has bragged to the Washington Post that she "like[s] to be on TV," orchestrated a 2-1 vote by the CPSC to initiate a mandatory recall process for certain Daisy Powerline BB guns...]
http://www.nraila.org/CurrentLegislation/Read.aspx?ID=164
Contact CPSC About Daisy Recall
[ Consumer Product Safety Commission (CPSC) Chairman Ann Brown, one of the remaining holdovers from the Clinton Administration, has chosen to step down from her position, but not before attempting a last-minute attack on air rifles...]
http://www.nraila.org/CurrentLegislation/Read.aspx?ID=155
Federal Agency Takes Aim At BB Guns
[The Consumer Product Safety Commission`s lawsuit against Daisy Manufacturing Co... seeks to force Daisy to recall two of its popular BB-gun models, for no other reason than that they are ...]
http://www.nraila.org/News/Read/InTheNews.aspx?ID=1206
Air Rifles In Line Of Fire
[With less than two weeks left in her tenure as chairman of the Consumer Product Safety Commission, Clinton Administration hold over Ann Brown is aiming to take a parting shot at an American cultural icon, the Daisy air rifle...]
http://www.nraila.org/News/Read/InTheNews.aspx?ID=1100
Safety Agency Chief Going Out With Gusto
[Ann Brown, with only three days left as chairman of the Consumer Product Safety Commission, has scheduled a "major news conference" today, at which, industry sources say, she will start a recall of millions of Daisy air rifles...]
http://www.nraila.org/News/Read/InTheNews.aspx?ID=1124
Issue From The Past Rears Its Head
[) introduced legislation this week requiring the Consumer Product Safety Commission (CPSC) to regulate the manufacture and design of firearms... Congress has already exempted guns from oversight by the CPSC, recognizing that firearms are already regulated by some 20,000 federal, state, and local laws and regulations, as well as by the approximately 700 standards set by the Sporting Arms and Ammunition Manufacturers Institute, which are reviewed by the National Institute of Standards and Technology...]
http://www.nraila.org/CurrentLegislation/Read.aspx?ID=691
Corzine-Kennedy "Consumer Protection" Bills
Poor Smokescreen For Back-Door Gun Prohibition [ But in 1976, Congress voted 76-8 in the Senate, 313-86 in the House, that the CPSC "shall make no ruling or order that restricts the manufacture or sale of firearms, ammunition, including black powder or gun powder, for firearms...]
http://www.nraila.org/Issues/FactSheets/Read.aspx?ID=149