The small white worms on your Chinese Elm tree are likely larvae of pests such as aphids or caterpillars, which can cause leaf damage and defoliation. This issue may be exacerbated by environmental factors or a lack of natural predators. Consider inspecting the tree closely for signs of these pests and treating it with appropriate insecticides or organic solutions, such as neem oil, to manage the infestation. Additionally, maintaining tree health through proper watering and fertilization can help it recover more effectively.
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