He claimed they were winning the war in the Atlantic, and the U.S. was acting as if it were in the war, anyway.
Declaring war on the U.S. would allow him to finally win the war in the Atlantic.
It was one of Hitler and Germany's worst mistakes of the war.
The Americans were assisting the Royal Navy in their search for U-Boats while under the guise of “neutrality”; the U-Boat commanders were naturally (and justifiably) outraged by this and wanted the opportunity to fight back.
Are you referring to Doenitz? The Germans also erred by (1) not building enough boats (diverting precious resources to beautifully designed and built but ultimately obsolete dreadnoughts like the Bismarck and the Tirpitz ((the Tirpitz basically spent the entire war in a Norwegian fjord... till she was sunk)) ) and (2) not keeping up with technology such as sonar. Thirdly they should have turned to hunting the hunters sooner. Ultimately the U-boat command suffered devastating losses.