What is the right course of action now?

You answered correctly. In situations where another vehicle, such as a tractor or a reckless car, is entering your lane or creating a dangerous situation, the priority is to reduce your speed and allow them space to merge or avoid a collision. German traffic law requires you to drive defensively and prevent accidents, even if another driver is acting incorrectly. That means you must slow down and, if necessary, let the other vehicle pull in. Changing to the left lane would be dangerous in this scenario since you might not have a clear view or enough space to do so safely. The best response is always to reduce your speed and create room for the other vehicle, as you selected. This helps prevent accidents and shows responsible driving behavior.