I ment when she is already reacting if I loosen it more she can bite people or other dogs.
Yes, once she is reacting then you need to keep control for everyone's safety. However, you should not just keep walking towards them (or letting them walk towards you) with a death grip on the leash--as selzer said, that only makes the problem worse.
Instead, if she starts reacting, still follow Mary Beth's advice about zigzagging, changing direction, whatever it takes. You'll have to drag her along with you at first, but keep it up until her focus is back on you, then reward her for that focus. You'll look silly, but it'll pay off. One of my favorites that I find most dogs have trouble resisting is to run backwards while calling them playfully. That gets their attention on me really quick usually. But your goal should be to keep her focus on you all the time, so do milder forms of zigzagging and direction changes whenever you're anywhere near other dogs, before she starts reacting to them, and make sure to reward her frequently. You have to do more than just feed her treats.
I do think you need to have another talk with your trainer and see if you can practice this with her some more. I am concerned because I am pretty familiar with the techniques your trainer describes (and have used them to great success on a variety of breeds and dogs), and I am not sure you are understanding them or implementing them correctly. You don't mention if this is going to be an ongoing consultation, so if it is, then ignore me.
But if you were just doing a one-time consult, call your trainer and see if you can get into some more regular lessons for the time being.
For what it's worth, I think this is normal in the sense that it isn't uncommon (and it does commonly manifest at that age), but I think it isn't something that the dog will necessarily grow out of on its own. Some dogs do, but they're in the minority and most dogs will learn that barking at other dogs on walks is rewarding, and will only get worse without training. So good on you for addressing this issue.
One other suggestion is that maybe while you are training, try to avoid busy (and especially narrow!) paths or high-traffic times. It sounds like you are encountering other dogs very frequently and don't have the option to stay away from them, so you might want to adjust your routine until you and your dog get a little better handle on this problem.
edit: Mary Beth posted while I was typing...a much simpler and more eloquent description of what I was trying to say!