The Nazis figured at least that Britain was neutralized and wouldn’t be a threat, they could always get back to dealing with them later.
Of course the big mistake was not thinking that inevitably America would get into the war.
We really don’t start getting enmeshed in the U-boat war until next April, IIRC. Donitz knew we were basically at war with Germany, and it was inevitable that sooner or later the informal hostilities would become formal. But by then the die was cast in the east and there was no turning back for Hitler. Hitler’s logic was that by crushing the USSR he would defeat Britain. Interesting theory since the USSR was the “good neighbor” to Germany and was shunning Britain.
I’ve always been an “Eastern Front” enthusiast and quite frankly, I’m looking forward to next Spring. Lots more to talk about then.