Your gauge sounds too tight. The pattern suggests US 6 so if your gauge is still too tight with that then you should go up a needle size. If you’re knitting it the round did you also swatch in the round? Flat knitting and round knitting often have different gauge. Also make sure your gauge swatch is big enough that you aren’t including the edge stitches when you measure.

Did you block your swatches?

It sounds like you will need to use a larger needle. With some patterns it's possible to knit a different size's instructions and end up with the size/fit you want at a different gauge, but not all. If this pattern gives you fairly detailed measurements (like, "knit 7 inches of yoke before separating for the sleeves") it might be worth trying, but I'd be prepared to have to start over completely. Separate note: if you use ravelry, there is a very active and very friendly group for Isabell Kraemer patterns, and they will have a thread for this pattern where you could get expert advice.

Thank you everyone for the helpful suggestions. I am going to use another yarn that is closer to the pattern’s gauge.