What is the right course of action in this situation?

Your answer is correct because according to German traffic rules, when a tram is stopped or moving slowly on its tracks, you should generally remain behind it, especially if it is in a situation where passengers might board or alight. Trams have priority and their stops are often hazardous areas due to passenger movements. Overtaking a tram on the right or left can be dangerous and is typically prohibited unless specific traffic signs or road markings allow it. Staying behind ensures safety for passengers and other road users and complies with the principle of patience and caution near trams. This is a common rule in urban traffic to prevent accidents.