Foreign policy of the Ronald Reagan administration of the Soviet Union's total export earnings). To restructure the Soviet economy before it collapsed, Gorbachev announced an agenda of rapid reform, based upon what he called perestroika (meaning "restructuring") and glasnost (meaning "liberalization" and "openness"). Reform required Gorbachev to redirect the country's resources from costly Cold War military commitments to more profitable areas in the civilian sector. As a result, Gorbachev offered major concessions to the United States on the levels of conventional forces, nuclear weapons, and policy in Eastern Europe. Many US Soviet experts and administration officials doubted that Gorbachev was serious about winding down the arms race,
History of Western civilization States capitalist economic system to outproduce the communist Russians. The United States military was in a state of low moral after its loss in the Vietnam War, and President Reagan began a huge effort to out-produce the Soviets in military production and technology. In 1985, a new Soviet leader, Mikhail Gorbachev took power. Gorbachev, knowing that the Soviet Union could no longer compete economically with the United States, implemented a number of reforms granting his citizens freedom of speech and introducing some capitalist reforms. Gorbachev and America's staunch anti-Communist president Ronald Reagan were even able to negotiate treaties limiting each