Shortcode for custom query not returning results when attributes are added

I'm trying to build a shortcode that will allow the user to choose what category is displayed and how many posts will show. The shortcode worked fine until I added the 'tax_query'

add_shortcode( 'latest_post', 'latest_post_query_shortcode' );
function latest_post_query_shortcode(  $atts ) {
    $atts = shortcode_atts( array(
            'post_per_page' => '',
            'category' => '',
    ), $atts );

    $args = array(
            'post_type'     => 'post',
            'post_status'   => 'publish',
            'posts_per_page'=> 3,
            'tax_query'     => array( array(
                                'taxonomy'  => 'category',
                                'field'     => 'slug',
                                'terms'     => $categories
                            ), ),
        );

        $string = '';
    // The Query
    $query = new WP_Query( $args ); 

    // The Loop
    if ( $query->have_posts() ) { ?>
        <section class="recent-posts clear">
        <?php while ( $query->have_posts() ) : $query->the_post() ; ?>
            <article id="post-<?php the_ID(); ?>" <?php post_class( 'left' ); ?>>
                <? echo '<a href="' . get_permalink( $_post->ID ) . '" title="' . esc_attr( $_post->post_title ) . '">';
                    echo get_the_title( $_post->ID);
                    echo '</a>';
                    echo '<a href="' . get_permalink( $_post->ID ) . '" title="' . esc_attr( $_post->post_title ) . '">';
                    echo get_the_post_thumbnail( $_post->ID, 'medium' );
                    echo '</a>';
                    echo '<a href="' . get_permalink( $_post->ID ) . '" title="' . esc_attr( $_post->post_title ) . '">';
                    echo '<button>Read More</button>';
                    echo '</a>';
                ?>

            </article>
        <?php endwhile; ?>
        </section>
    <?php } else {
        echo 'No posts found';
    }
    /* Restore original Post Data */
    wp_reset_postdata();
}

Before adding the tax_query, it would show the three latest posts, with the tax_query, it just shows "No posts found." What am I doing wrong here?