Pete This is classic case of side wall band brackage.
Are your tires Trailer grade?
I am still tee'd off at my brother in law for putting passenger tires on my Boler
when I asked him to put trailer grade tires on.
Trailer tires have a stiffer side wall construction to compensate for any sway while going down the road.
With a passenger tire a good bump with all the trailer weight
can bust these bands letting air through and making a buldge like this.
To bad too it looks like you got good tread left.
In Maine we do a light
test to see if a tire is good to go...
On a dark night, hold flashlight under trailer against tire if you can see light
shining through to outside of tire you better think of replaceing.