Squirtle moves so fast that its hard to do on reaction. A smart Squirtle player will be extremely hard to land on. However, even if you don't manage to land on him he still does have a tiny amount of endlag if he misses the attack, so if you make sure not to be too predictable with when you jump in neutral you might be able to punish Withdraw if its used too recklessly. Certain moves and projectiles can stop Squirtle's momentum and leave him open for a quick punish so if your character has any of these try to make smart use of it to keep Squirtle from abusing that move.
Another weakness of that move is its long start up time. Squirtle can't use it safely in close quarters combat. He especially struggles with sword fighters who manage to stay in his face because he can't contest with their attack range.
