I really don't like the idea of hitting your child back at all, especially a two year old. Lots of kids go through a hitting stage at 2 or 3 and I don't think there's a ton to be concerned about here. I don't think your child is old enough to understand the reason you would pinch/hit her back is because it hurts you. It's simply not something that I think a two year old would understand.
With that said, nor do I think explaining yourself would register with a two year old either. Maybe walking away...maybe that would work, but I doubt it.
First, understand that it's probably not a huge deal. If she were five, I'd be concerned. But at two this is normal behavior. You and your hubby need to be consistent. She can't have one set of "dad rules" and one set of "mom rules." Remember, you are a unified front on the battle lines of toddlerdom! (or whatever). If you are unwilling to hit and if he is unwilling to reason with her then you need to be unified on what you can do. A timeout is completely reasonable here, and in effect that is what you are doing now anyway. When your daughter hits or pinches anyone she can get a timeout of 2 minutes or any other, reasonable consistent, period of time.
Remember, as parents you need to be on the same team.
As a dad I hate hearing "We need to talk..." That shuts me down. Have a plan and approach it this way "I've been thinking that dd has been too aggressive and we need to do something about it. I agree with you..." (all men love to hear it!) "...that we need to do something. I think we need to _____ and nip this thing in the bud. What do you think?"
This does a couple things:
A) Your husband will appreciate your willingness to stop the problem.
B) You'll flatter him.
C) You'll have a proactive solution ready.* (Though not the zit removal kind)
D) And you'll ask for his opinion, but you probably won't need it.
He'll probably cave right away. Seeing your initiative, he'll appreciate how very astute you are in these matters. Just ask me, I cave to my wife almost all the time in matters of child-rearing.
*On "C". If I've had the conversation in the past and know it will start an argument I don't want to hear "What do you think?" without knowing what my spouse thinks first.