The phrase is not about actual fires, but rather confronting a challenge with similar tactics. When he started to raise his voice, I decided to fight fire with fire and spoke firmly.
Pro Tip 2/3
Confrontational Contexts
It's usually used in situations where there's conflict or opposition. As the debate got heated, she decided to fight fire with fire and argued passionately.
Pro Tip 3/3
Potential Escalation
Using the phrase hints there could be an increase in tension or aggression in response. The negotiations were going nowhere, so they chose to fight fire with fire with a firm ultimatum.