Glad you are enjoying the books Ben.
In answer to your question, no you can't use Sear and Acid with Retaliation.
Sear and Acid can only be used when rolling for a damage score (i.e. when you win a round and roll dice to add to your Brawn or Magic to apply damage).
"Damage dice" are a different type of damage that are more 'instant' and apply to a lot of abilities where you don't add Brawn or Magic.
Retaliation uses damage dice.
Hope that makes sense. The distinction is made on page 11 of the book (if you have the latest edition).