This only really works (for some value of 'works') if you go for external autarky, internal free market. Otherwise, you very much have the government picking winners and losers; banning or heavily tariffing the import of foreign steel, say, will be great for your steel industry, but probably pretty dire for other heavy industry, which consumes steel.

Even the autarky option (or somewhat less extreme options like only applying protectionism to end products, rather than raw materials and intermediate products) is only free market if you kind of decide that _end consumers_ are not part of the free market. The car industry in particular has produced many examples of how this goes; look at the East German and Soviet car manufacturing industries, or to some extent the British one prior to European accession. Pumping out shoddy overpriced products which only had a market because people were forced to buy them, and which were utterly unable to compete once imports were finally practical.