This short story, which is part of O'Brien's larger collection of short stories entited The Things They Carried, concerns the author's own intial reaction to being drafted and how he ventured north in order to escape the draft and go into Canada. This was something that a minority of young American males did who were unwilling to fight in the Vietnam war for a cause that was at best dubious. O'Brien himself describes how he crucially is taken on a boat to the rainy river of the story's title, with Canada in front of him and the US behind him:
I remember staring at the old man, then at my hands, then at Canada. The shoreline was dense with brush and timber. I could see a squirrel up in one of the birch tees, a big crow looking at me from a boulder along the river. That close--twenty yards-and I could see the delicate latticework of the leaves, the texture of the soil, the browned needles beneath the pines, the configurations of geology and human history. Twenty yards. I could've done it.
The setting is so important because it enacts the very important decision the speaker has to make. He has to choose between going to Canada and escaping the draft, but letting down his nation, and going to fight in a war that he is deeply ambiguous about. He stands, at this particular point in the short story, straddled between two nations, between two options, and between two very different futures. The setting highlights this aspect of the story.