Although relations had worsened after Reagan came to power, by the mid-1980s politicians in the USSR realised that change was necessary.
In 1985 Mikhail Gorbachev became Soviet leader. He realised that the USSR could no longer compete with the USA in the arms race, if the Soviet economy and communism were to survive.
Gorbachev wanted to modernise the USSR and improve relations with the USA. He realised that the Soviets could no longer compete in the arms race if the USSR was to be modernised.
The Soviet economy was struggling severely and the Soviets could not commit the expenditure necessary to maintain the arms race. Living standards in the USSR were falling while in the West they were rising rapidly.
Gorbachev believed the Americans would be keen to end the arms race - they also wanted to reduce military spending. America had built up huge debts and Reagan wanted to cut taxes.
The USSR was struggling to meet commitments in Afghanistan, as well as keeping forces stationed in Eastern Europe and supporting communist regimes in countries such as Cuba.
There was growing opposition to Soviet policies in the satellite states of Eastern Europe and discontent within the USSR from consumers and national minorities. For example, in Poland there was a political movement called Solidarity which aimed to end Soviet control of the country.
Gorbachev introduced policies of Glasnost and Perestroika in an attempt to make communism work in the USSR.
This was an attempt to be more ‘open’ in dealing with the West. Gorbachev encouraged people to be more honest when talking about politics. He encouraged more freedom of speech - he wanted communist politicians to take criticism on board, look to make changes and stamp out corruption.
This was an attempt to modernise and ‘rebuild’ the Soviet state. Gorbachev realised that military spending had to be reduced. In February 1989, the USSR withdrew its troops from Afghanistan ending nine years of occupation.
Government reports had also informed Gorbachev that if the economy was to survive, more small businesses were needed.