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The easiest fix would probably be to Select the cricle and Object > Arrange > Bring to front
Make sure the circle has no fill.
Other ways could be to make a clipping mask, but that would also depend upon how this would be used afterwards. Can you tell us about that? Should this be for print or a website and do you need the rectangle to be gone for good? Or should it just not cover anything and then be priontable.
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Bring the circle forward (making sure it is unfilled) should do it. Object>Bring forward or select the image and use Send to Back from that same menu item.
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Cut the tree.
Select the circle.
Click the Draw Inside icon at the bottom of the Toolbar.
Select Paste in Place.
Click the Draw Normal icon at the bottom of the Toolbar.
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Please show us how these itames look in the layers panel.
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Can you just open the layer by click on the little arrow?
Is that a vector image? Maybe you can just deselect all, take the direct selection tool, click on the white rectangle and then hit the delete key?
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Holy moly...your suggestion with the Direct Selection tool worked! Thank you very much, Monika!
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Glad you could solve it! Have a nice weekend!