The (deeper) solution to this problem is to step away or distance yourself from your emotions. That is the only true solution in my opinion. Once you distance yourself from your emotions (anger, jealousy, embarrassment, etc), you no longer take the provocation as personal or threatening. You just calm down, and respond assertively and effectively. "I don't appreciate that kind of language/treatment/remark."

As long as you're lost in the emotions and the heat of the moment, the response that comes out is likely going to be one you will regret. So, try to step away, zoom out, and see things more clearly, before responding.

Tricks like "take a deep breath", "wait 30 seconds", or "just smile in return" are very superficial solutions that may or may not work.

I can hear you saying, "Yeah, right. Easier said than done, buddy !". I agree with you ... so is life ! T.R.Y.