Indeed. I don't understand why people think it's confusing to use the term "Indian." It seems a little anal retentive to me.
"The Europeans traded with the Indians." OK that one sentence all alone would be confusing but if it's in a book on the French and Indian War? I mean if you read "Indian" and think Hindu warriors were raiding farms in Upper New York then you're an idiot and context doesn't matter to you.
And "American" is kind of an ambiguous term as well without any context (like most words).
"What race are you?"
"Indian."
"Cool dude, what tribe are you?"
"No, I'm a real Indian."
"Huh? What reservation are you from?"