This article examines the consequences of a trade barrier imposed on an industry that is characterized by spatially-dispersed producers and consumers, and substantial intra-national transportation costs. It was concluded that we may have witnessed a situation wherein the U.S. government protected a foreign industry with one trade barrier, and then was forced to establish another in order to offset the effects of the first. At any rate, this new countervailing duty (CVD) would have implied that the Canadian hog industry could expect new changes in relative hog prices across Canada and in the dynamics of price adjustments in the North American hog market, except for the fact that the new CVD was overturned in the first test of the Canada-U.S. Free Trade Agreement provision for challenging one nation’s trade policy before the Extra-Ordinary Challenge Committee.