Deduce where American goes to generate terror (5)
I believe the answer is:
infer
'deduce' is the definition.
(I know that deduce can be written as infer)
I don't understand how the remainder of the clue works.
(Other definitions for infer that I've seen before include "Take finer meaning from" , "Derive as a consequence" , "Read between the line" , "Draw meaning from" , "Conclude by reasoning" .)