What is the right course of action now?

Your answer is correct because both actions you selected are appropriate and align with German traffic rules for handling such situations.

Reducing your speed further is important to increase reaction time and control, allowing you to respond safely to the tractor pulling into the lane. According to §1 StVO (General Rules of Conduct), you must always adjust your driving behavior to the traffic situation to prevent accidents.

Allowing the tractor to pull into your lane means you give way where necessary, avoiding conflict or a collision. For large slow vehicles like tractors, it is safer to accommodate their maneuvers as they often need more space and time.

Moving into the left lane (option 3) is not correct here because it could cause danger or conflicts with oncoming traffic, especially on roads without a clear overtaking zone.

In summary, slowing down and allowing the tractor to merge ensures safe interaction with other road users and complies with German traffic laws promoting safety and cooperation on the road.