The Problem:
Your dog is talking smack at my dog, my dog reacts, your dog gets even more amped up, the neighbor's dog notices and starts barking. Now we have two lunging/barking dogs and a whole neighborhood bark party going on. But WHY must it be like this?
Things We Must Understand:
1. Dog's read body language from far away! Before getting anywhere close, they have assessed the posture, tone, tenseness, quality of movement, and intention of another dog (or person). This happens in an instant!
2. Your dog is better at reading body language than you are. Dog's are fluent in body language and we are not. This is for many reasons, perhaps most obviously, it's their first and only language. Secondly, their survival used to depend on it (before we leashed and contained and housed them). Thirdly, they are still in tune with the natural intelligence of the world because they refuse to use smart phones.
3. A dog reacting to another dog's threat is not wrong. A threat can be subtle: a locked shoulder, a tense jaw, a cold stare-down, or forward leaning posture. If your dog is reacting to another dog "talking smack" then I wouldn't necessarily label him as reactive.
4. A dog "being reactive" to something or someone completely non-threatening because he has post traumatic stress about an incident is also not "wrong" but they are by definition a "reactive dog."
5. When you allow your dog to "talk smack" it escalates the situation by forcing the other team to talk back. Now your dog is getting validation that he SHOULD be talking smack, because that guy over there is also calling out threats.
What To Do About It:
Understand where your dog's behavior is coming from. Is your dog lacking confidence? Is your dog lacking socialization (exposure to new environments)? Is your dog truly aggressive? Address these issues with a trainer.
End the leash pulling! A dog pulling on a leash towards another dog could have friendly or unfriendly intentions and it's not always easy to tell which is which. A dog with barrier frustration who is normally pro-social may feel stressed on leash and appear reactive/aggressive.
If your dog is dragging you like a Mack Truck, you must STOP this behavior (even if you know they're actually friendly). It reads as ugly and dangerous to to other dogs. If your dog is barking AND lunging at people and dogs, you have a SERIOUS problem and need to seek a trainer.
Work to read signs of stress in your dog before he goes over-threshold. Look at his tail tone, gait, quality of movement, etc. and become expert at feeling his emotional state. Having somatic self-awareness helps immensely with this. Interrupt his pattern of reacting or talking smack before peak arousal.
Tools we use to keep a dog moving, flowing, and feeling good: Regular hand-feeding on walks. Resistance feeding on walks, especially when you sense a trigger nearby. Let your dog push through this stress with YOU, not the other dog. Tug toys for dogs who have high toy drive are great, and at a safe distance you can play a game of tug with your dog to take the stress off of the situation. This is particularly great for dogs who are conflict seekers. They should find the most conflict with you as the handler so that you as the handler can be the one to resolve the conflict. Speak on command is another great tool because this acts as a pressure-relief valve for any stress the dog is feeling. It also gets them in touch with their body and decouples the projection of energy from the surging of their body.
Tools we use with dogs who won't take food because their stress level is too high (or the owner fed them breakfast and they just ain't hungry!): The high collar, changing direction, avoiding triggers until the dog will take food.
Behaviors You MUST Cut Out of Your Dog's Routine:
Absolutely do not allow fence fighting.
Do not allow raging at doors or windows when dogs and people pass by.
Alarm barking, territorial barking, and compulsive barking are all signs of excessive stress, and your dog needs help managing this.
If, on the other hand, your dog alerts you when someone's at the door and then easily settles down when it's clear there is no threat, that is perfectly fine. There are appropriate times to bark, and inappropriate times to bark. You must identify the difference.
Stop letting your dog act like he's pulling a sled when he's on leash. Stop following your dog every which way he pulls you. Stop letting him forwardly project his energy at other dogs! Catch your dog's attention and engage him before he goes over threshold.
Play-train your dog to get engagement. Reduce his stress levels at home so he can increase his emotional capacity. Walk in low distraction areas when possible to build a bond before venturing out in the "real world."
Most importantly, if you feel overwhelmed with your dog's behavior, get help!